Home > Uncategorized > Threat To State Old Age Pensions By Fine Gael Minister carried out in Budget 2020

Threat To State Old Age Pensions By Fine Gael Minister carried out in Budget 2020

All Pensioners on Contributory and Non-Contributory Old Age Pensions To Be Confined to Minimum Essential Standard of Living in their Old Age After A lifelong Contribution to Irish Society According to Minister Regina Doherty

“All State pensions should not be equal”, says Minister

——————————————————————-

There must be Lower Contributory Social Insurance Pensions and Benefit Payments in Lower Cost Areas of Ireland-Minister for Social Protection,

But no mention of Lower Contributions!!!!

The same payments for similar households in different parts of Ireland may not be appropriate, she said, adding that political and public “buy in” would be needed to explain to the “lady in Donegal” why she was going to get “more, or less” than “the lady somewhere else” in the State.

Ms Doherty said she wants to reform the welfare system and bring an end to €5 top-ups on every welfare payment being announced on budget days.

Minister said “all pensions should not be equal….. she wants to reform the welfare system and bring an end to €5 top-ups on every welfare payment being announced on budget days. Kitty Holland Irish Times July 6

————————————————————————————————————————————-

Second Stage of Social Welfare (No 2) Bill Being Debated, Today, Nov 13 in Dáil :Social Welfare No 2 Bill   2019  Bill 89 0f 2019 Bill entitled an Act to amend and extend the Social Welfare Acts; to amend the National Minimum Wage Act 2000 and the National Training Fund Act 2000; and to provide for related matters.

No mention in Social Welfare Bill of Commitment in  Government Pensions Roadmap to index Contributory Social Insurance Pensions and Benefits to average industrial wage.

Instead these are frozen in 2020 despite 1.4 billion euro surplus of contributions over pay-outs from Social Insurance Fund in 2019, and an accumulated surplus of 3.9 billion over the last four years

Was ICTU sold a pup by Government???

Lorraine Walsh,  Irish Independent , August 20, 2019 Full Article Below

Plans to ensure the State pension keeps its value are being blocked by a Government department, it has been claimed.

A senior union official, Pensions Policy Officer, Dr Laura Bambrick, ICTU,  said the Department of Finance is putting the brakes on proposals to give older people greater security.

This would be done by ensuring the value of the State pension never drops below the equivalent of 34pc of the average wage.

————————————————————–Freezing Contributory Social Insurance Payments In Budget Was Part of A Long Term Government Strategy to Means Test Contributory Benefits

Minister Outlined Her Plan Last July-3 months before Budget  https://wp.me/pKzXa-1ma

All State pensions should not be equal, says Minister, Kitty Holland, Irish Times

Saturday, July 6, 2019, 01:00

It is not “fair” that some older people receive State pensions that are more than they need while others on the same amount live in poverty, Minister for Social Protection Regina Doherty has said.

Ms Doherty said she wants to reform the welfare system and bring an end to €5 top-ups on every welfare payment being announced on budget days.

She said everyone should have a basic minimum income guaranteeing that they can participate in society but that the current system was not delivering this.

The Minister said “if we are really serious about everybody enjoying the benefits of a recovering economy, well then we need to look at those who are most at risk of poverty and the people in consistent poverty as opposed to just doing a little bit for everybody”.

The same payments for similar households in different parts of Ireland may not be appropriate, she said, adding that political and public “buy in” would be needed to explain to the “lady in Donegal” why she was going to get “more, or less” than “the lady somewhere else” in the State.

“So a long conversation will be needed,” she said, adding that the changes would not be achieved in one budget cycle.

Ms Doherty said that despite a recovering economy and increases in welfare payments, 120,000 children still lived in consistent poverty, while some welfare recipients were getting more than they needed, including pensioner couples in urban areas.

“It’s not just about the rates. It’s about ensuring everyone has a minimum standard of living. What we have at the moment is people being left behind because we’re quite happy to leave everybody the same and everyone is not the same.”

© 2019 irishtimes.com

———————————————————-Despite Raiding 3.9 Billion Accumulated Surplus from Social Insurance Fund from 2016 to 2019, Government Froze Unemployment Benefits and Pensions in 2020, costing beneficiaries 168 Euro per year due to rising prices  https://wp.me/pKzXa-1ma

Mr McKeon, Secretary General of Department of Social Protection, will tell the Dáil’s Public Accounts Committee (PAC) that the SIF had an accumulated surplus of €2.3bn last year(2018) after spending of €10bn. It’s anticipated that the accumulated surplus will reach €3.9bn by the end of this year (2019).–Irish Independent Nov 7

HAVING FROZEN THE BENEFITS for 2020 Government Raided  the estimated 1.4 billion surplus in 2019, having raided 2.5 billion accumulated surplus up to 2018, giving a total raid of 3.9 billion since 2016 and an even bigger accumulated surplus in 2020 as the number at work continues to increase!  https://wp.me/pKzXa-1ma

If the government had continued the 5 euro rise in maximum individual payments with proportionate increases for lower payments, the additional pay out would have been approximately 400 million at most, leaving the Social Insurance Fund with a continued large annual surplus of at least 1 billion and an accumulated surplus of 3.4 billion since 2016!

2016       2017       2018       2019
Surplus(July) ^1                              453         730       1,135      1,436
Surplus(November)                        453         730        1,140     1,400

Accumulated Surplus (est)            453        1183       2300        3900
^1 Pay Related Social Insurance, Tax Strategy Group – 19/06 July 2019

Oireachtas Website

https://www.oireachtas.ie/en/press-centre/press-releases/20191106-pac-to-examine-department-of-employment-affairs-and-social-protection-annual-report/

Public Accounts Committee 6 Nov 2019, 03.46

“The 2018 Social Insurance Fund shows receipts of €11.2 billion and payments totalling €10.06 billion in the year. An Exchequer subvention was therefore not required in 2018”

2018 (Billions)

Receipts            11.20

Paid Out            10.06

Surplus                1.14

 

Looming pensions time bomb will lead to €3bn deficit in social welfare fund

Cormac Quinn   Irish Independent, November 7 2019

The pensions time bomb is set to contribute to a €3bn-a-year deficit in the Social Insurance Fund (SIF) by 2030. (but it had a surplus of 3.9 billion in 2019 which was raided  by government which froze payments for 2020-PH)

Department of Social Protection boss John McKeon will warn of the looming black hole in the fund that covers welfare payments like pensions and jobseeker’s benefit when he appears before the Dáil’s spending watchdog this morning.

Mr McKeon is expected to say that the SIF appears to be in “robust financial health” at present, but that Ireland’s ageing population and “pension pressures” will inevitably see it enter into deficit.

It comes a week after the Government signed off on Social Protection Minister Regina Doherty’s plan to bring in an auto-enrolment pension scheme for private sector workers as part of efforts to offset the demographic time bomb.

Mr McKeon will tell the Dáil’s Public Accounts Committee (PAC) that the SIF had an accumulated surplus of €2.3bn last year after spending of €10bn. It’s anticipated that the surplus will reach €3.9bn by the end of this year.

However, Mr McKeon’s statement to the committee warns that such surpluses can be wiped out very quickly.

He will give the example of a €3.4bn surplus being eliminated in 15 months during the economic crisis.

He says that future demographic trends will significantly increase expenditure of the SIF “as the number of older people in our society increases”.

Next year will see increased spending from the SIF of around €520m, with more than €330m of that due to “pension pressures”.

Mr McKeon says: “This trend will continue with the result that it is inevitable that even with positive economic conditions the fund will enter into and remain in deficit.”

The most recent actuarial review forecasts an annual spend of about €15bn and yearly deficit of around €3bn by 2030.

Mr McKeon says this “sets a challenging context for the development of medium to long-term policy”. The Government’s latest national risk assessment has identified the pensions issue as one of the most significant issues facing the State in the coming years.

The number of people entitled to the State pension is set to more than double over the next 36 years.

The auto-enrolment scheme for pensions is not due to be launched for another two years, despite being 20 years in gestation.

It will apply to 585,000 private sector workers who have no pension provision at present. These people will be automatically opted into the new scheme.

Those aged between 23 and 60 and earning more than €20,000 will pay 1.5pc of their pay for the first three years.

Their contribution will rise by 1.5pc every three years after that, until it reaches 6pc of their wages at the beginning of year 10.

Employers will make the same contribution, under the plan signed off by the Cabinet.

Separately, Mr McKeon will update TDs on the impact of Brexit on social protection services. He says the department has signed an international convention with the UK which “fully protects the interests of citizens from both jurisdictions regardless of the nature of any Brexit”.

“People will have access to the same benefits on the same terms under this agreement as they do at present,” Mr McKeon will say.

Irish Independent

————————————————————-Auto-Enrolment (compulsory private sector occupational pension) should be a good thing. But will it be used by Government to freeze CONTRIBUTORY Social insurance Pension?

Contributory Social Insurance(sometimes called social welfare or PRSI) Pensioners got no increase in budget.  Siptu economist Michael Taft said pensioners would have needed an extra €168 a year added to their payments to keep pace with inflation. https://wp.me/pKzXa-1ma

In July Ms Doherty said she wants to reform the welfare system and bring an end to €5 top-ups on every welfare payment being announced on budget days. Only those below the poverty threshold(MESL) should receive them! She promised Irish Congress of Trade unions that the contributory social insurance pension would be indexed to the average industrial wage. But tis didn’t happen in the budget. Government just froze the pensions though prices will continue to rise. IN HER STATEMENT YESTERDAY , THE MINISTER DIDN’T MENTION INDEXATION EITHER! Many retired public servants also have contributory social insurance pensions as part of their pension remuneration

Will ICTU/SIPTU  Do  anything About It??? 

Discussion of Auto-Enrolment on RTE

Interview With Dr Laura Bambrick, Pensions Officer, ICTU,

and

Dr. James Charles Stewart
Adjunct Asistant Professor, Trinity Business School

on Sean O’Rourke, RTE Radio 1 yesterday morning, Oct 31,   https://www.rte.ie/radio/utils/share/radio1/21647391

Auto-Enrolment: Almost 600,000 workers to pay into new compulsory private sector pension scheme-IRISH Times

A total of 585,000 workers will pay up to 6pc of their wages into a new automatic enrolment scheme to be rolled out in three years

Anne-Marie Walsh, Irish Times,  October 30 2019

A total of 585,000 workers will pay up to 6pc of their wages into a new automatic enrolment scheme to be rolled out in three years.

They will be forced to pay into the long-awaited scheme for six months at a rate of 1.5pc of their pay – after which they can opt out.

The new scheme aims to ensure a better retirement income for most of the workforce who have nothing but the state pension to rely on in old age.

Under the final design of the scheme announced this evening, workers will pay 6pc of their wages after ten years.

Those aged between  23 and 60 and earning more than €20,000 will pay 1.5pc of their pay for the first three years.

Their contribution will rise by 1.5pc every three years afterwards until it reaches 6pc  of their wages at the beginning of year ten.

Employers will make the same contribution, under the plan signed off by cabinet this morning.

However, employees would have ended up with a bigger pension pot under the government’s original proposal.

An initial  ‘strawman’ plan would have meant that contributions would rise for workers and employers  from 1pc to 6pc over just six years.

Details of the government’s contribution were not revealed this evening.

Minister for Employment Affairs and Social Protection Regina Doherty said this has yet to be decided.

She  said the longer timeframe for increasing contributions from the original proposal was due to concerns expressed by both employees and employers.

She said concerns were raised about the strawman proposal to escalate the contribute rate from 1pc to 6pc over a shorter timeframe.

Details of the final design of the scheme that has been promised for over 20 years were unveiled this evening.

Ms Doherty said the government aims to have a system in place by 2022 that ensures all pensioners have enough to lead a comfortable life in retirement.

She denied that the new scheme would replace the state pension, which she described as the bedrock of the pension system.

But! But! But!

Contributory State Pensions to Be Treated as Social welfare Handout at Discretion of Government!

Auto-Enrolment (compulsory private sector occupational pension) could be a good thing. But will it be used by Government to freeze Social insurance Pension?

Contributory Social Insurance Pensioners got no increase in budget.  Siptu economist Michael Taft said pensioners would have needed an extra €168 a year added to their payments to keep pace with inflation. https://wp.me/pKzXa-1ma

In July Ms Doherty said she wants to reform the welfare system and bring an end to €5 top-ups on every welfare payment being announced on budget days. Only those below the poverty threshold(MESL) should receive them! She promised Irish Congress of Trade unions that the contributory social insurance pension would be indexed to the average industrial wage. But tis didn’t happen in the budget. Government just froze the pensions Though prices will continue to rise

 

All State pensions should not be equal, says Minister

Kitty Holland

 

Last Updated: Saturday, July 6, 2019, 01:00

It is not “fair” that some older people receive State pensions that are more than they need while others on the same amount live in poverty, Minister for Social Protection Regina Doherty has said.

Ms Doherty said she wants to reform the welfare system and bring an end to €5 top-ups on every welfare payment being announced on budget days.

She said everyone should have a basic minimum income guaranteeing that they can participate in society but that the current system was not delivering this.

The Minister said “if we are really serious about everybody enjoying the benefits of a recovering economy, well then we need to look at those who are most at risk of poverty and the people in consistent poverty as opposed to just doing a little bit for everybody”.

The same payments for similar households in different parts of Ireland may not be appropriate, she said, adding that political and public “buy in” would be needed to explain to the “lady in Donegal” why she was going to get “more, or less” than “the lady somewhere else” in the State.

“So a long conversation will be needed,” she said, adding that the changes would not be achieved in one budget cycle.

Ms Doherty said that despite a recovering economy and increases in welfare payments, 120,000 children still lived in consistent poverty, while some welfare recipients were getting more than they needed, including pensioner couples in urban areas.

“It’s not just about the rates. It’s about ensuring everyone has a minimum standard of living. What we have at the moment is people being left behind because we’re quite happy to leave everybody the same and everyone is not the same.”

© 2019 irishtimes.com

————————————————————-Pensioners will be €168 worse off next year due to inflation.  Siptu economist Michael Taft said pensioners would need an extra €168 a year added to their payments to keep pace with inflation.

Anne-Marie Walsh, Irish Independent, 

Pensioners will be €168 a year worse off due to price hikes next year after failing to get another €5 in the Budget.

The Government’s forecasted increase in the cost of living would wipe €3.22 a week – or €168 a year – off the value of the full contributory pension in 2020.

Inflation is set to jump from 0.9pc this year to 1.3pc next year, and 1.4pc in 2021, according to the Government’s Economic and Fiscal Statement released on Budget day.

The pension would therefore have to rise by the same amount to keep up with predicted price rises.

Siptu economist Michael Taft said pensioners would need an extra €168 a year added to their payments to keep pace with inflation.

“The failure to, at a minimum, increase weekly payments by the level of price increases means that pensioners – and all those reliant on social protection payments – will suffer a cut in living standards,” said Mr Taft, who addressed a Nevin Economic Research Institute seminar on Budget 2020 in Dublin yesterday.

“There is no doubt this will increase poverty.

“This is the logical result of the Government’s failure to protect those on the lowest incomes.”

He said although there was a €2 a week hike in the fuel allowance and it is paid to many pensioners, not all get it as it is means tested.

However, he said the allowance would not make much of an impact on incomes as it only covers a limited number of weeks over the winter.

Mr Taft said it contrasts sharply with a big tax break for those set to inherit up to €350,000. “It’s nice enough if you have that coming down the line,” he said.

He called for a supplementary budget if there is an “orderly” Brexit because the Government’s calculations were based on a worst case scenario.

Age Action spokesperson Corona Joyce said Budget 2020 eroded the gains that the previous four budgets gave to older people.

“Budget 2020 did not offer the majority of older people the support they need to meet the rising cost of living that is anticipated by the impacts of Brexit and an expected increase in inflation,” she said.

“For example a person over 80, not living alone, received €1.08 per week to cope with Brexit, the carbon tax increase and rising cost of living.”

Michelle Murphy of Social Justice Ireland said welfare recipients will be left behind if rates don’t keep track with increases elsewhere in the economy.

Meanwhile, economist Robert Sweeney of social change think tank, TASC, said tax cuts in recent times have increased the Government’s reliance on corporation tax.

——————————————————————-Government To Give No Priority to Social Welfare rises In Next Election if Brexit Deal Agreed between EU and UK

Tax Cuts to be Prioritised Instead!

Donohoe  said once Brexit is clear – particularly if there’s a deal – ” it will be possible to continue to make progress on reducing the point at which taxpayers pay the higher rate of income tax.” And he signalled that it will be a central part of Fine Gael’s next election manifesto

Government Snatched over 1 Billion Euro from Social Insurance fund in 2019 to be used for purposes other than Social Welfare Payments  https://wp.me/pKzXa-1ma

PRSI TAX STRATEGY GROUP July 2019

Social Insurance Fund(SIF) income and expenditure, 2016 to 2019.

Outturn                    2016                 2017               2018  (provisional)    2019  estimate

€ Millions          € Millions                € Millions                € Millions

SIF income                       9,217                 9,816                 10,625                            11,240

SIF expenditure                8,764                9,086                  9,491                              9,803

Surplus                               453                    730                    1,135                              1,436

KPMG Projection for Department of Social Protection! Completely Wrong!!!

Receipts are underestimated though the number at work and  average pay was increasing!

Receipts    Payments        surplus            % of GDP

2018                      9.8                 9.5                  0.2           0.1%
2019                      9.9                 9.9                  0.0          0.0%

The Total Increase in all Social Welfare payments in 2019  will be  361.6 million including the 5 Euro per week budgetary increase in maximum payments

The excess of Social Insurance Contributions over Total Contributory Social Insurance Benefits was FOUR TIMES THIS FIGURE at 1.436 BILLION

If the number at work and pay increases continue in 2020 as in 2019, the government will snatch over 2 billion euro from the fund as the 5 Euro increase in maximum rates has been discontinued.

The contributions to the Social Insurance Fund come from employees and employers. As the employer contribution is a labour cost it effectively comes from the labour of employees.

Budget 2020 to hit poorer households harder – Economic and Social Research Institute

Robert Shortt RTE Economics Correspondent

“The decision by the Government not to adjust income tax rates or raise welfare payments in Budget 2020 will hit everyone in the pocket next year.

This is because wages and prices are going up and so if people earn more, they will pay more in tax. Those on welfare will be left behind.

The ESRI has calculated that the Budget will reduce the incomes of the poorest 10% of households by 3% but leave the highest earning 10% of households worse off by just 1%”

Budget 2020 ‘betrayed the vulnerable’, Social Justice Ireland has said 

 Kitty Holland, Wednesday, October 9, 2019, 21:38

A supplementary budget will be necessary to protect the most vulnerable in the event of a hard Brexit, Social Justice Ireland has warned.

In its analysis the think tank said Budget 2020 had “betrayed the vulnerable and left many further behind”. While most of the poorest had seen no increases in their incomes as a result of the Budget, Brexit would deliver an increase in the cost of living of between €892 and €1,360, per household, per year.

The poorest 30 per cent would be hit hardest, particularly with rising food costs, said the organisation’s chief executive Sean Healy.

“While TDs will see their salaries rise by about €1,600 in the coming year (€30 a week) many of the most vulnerable will see their welfare payments unchanged. Among other things they will face additional increases in the cost of food and higher charges for public transport as a result of the increased carbon tax.

“The choices made by Government in Budget 2020 will mean that vulnerable people will see their standard of living fall and they will slip even further behind the rest of society. This is not acceptable.”

SJI had called for a €9 per week increase in welfare payments to ensure rates kept pace with wage increases. It expressed “regret” there was no increase to core welfare rates and that a recommended 30c increase in the national minimum wage – to €10.10 an hour, has been shelved pending Brexit.

“Despite the necessary Brexit-induced caution we believe the resources to deliver an increase in welfare rates were there.”

There had been “no progress” in addressing poverty among people with disabilities.

“Among people who are unable to work due to illness or disability more than one in three (35.4 per cent) live on an income below the poverty line. . . Budget 2020 did not take the necessary steps to improve services and funding in this area [and]did not move to introduce a cost of disability payment.”

Its call for an effective corporation tax of six per cent, which was based on the “principle of fairness”, was not delivered. This was “regrettable”.

“SJI has continually highlighted the fact that Ireland is a low-tax economy with its total tax-take among the lowest in the EU.”

Mr Healy said the poorest must not be made pay for a hard Brexit adding he would “fight hard” for a supplementary budget to protect this cohort in such an event.

© 2019 irishtimes.com

—————————————————————-Social Justice Ireland Wants 9 Euro Welfare  Rise to Protect Poorest from Brexit

Dr Seán Healy said: “Poverty will rise if welfare rates do not keep pace with these changes in Budget 2020. This is why Social Justice Ireland is calling for an increase of €9 in minimum social welfare rates in Budget 2020.”

Irish Examiner, Tuesday, October 01, 2019  https://wp.me/pKzXa-1ma

Social Justice Ireland say the poorest people in society need to be protected from the potential economic shock of Brexit.

The Government is set to release its budget for 2020 on Tuesday next.

However, the Irish Fiscal Advisory Council is warning Britain’s exit from the EU could hit the State’s tax take hard.

Dr Seán Healy, chief executive of Social Justice Ireland, said social welfare payments need to go up to protect the poorest from the effects of Brexit.

He said: “We are one week away from a Budget that is being shaped by Brexit. It is vital that available resources are prioritised on protecting communities, jobs and the vulnerable.

“In practical terms this means investing in communities, in indigenous enterprise and jobs creation, and it means ensuring that those who are reliant on social welfare are not left even further behind.”

Michelle Murphy, Research and Policy Analyst at Social Justice Ireland, said: “In order to protect the most vulnerable while preparing for Brexit we must ensure that we close the gap between current minimum social welfare rates and the benchmark of 27.5% of average earnings.

“In Budget 2020 it would take an increase of €9 to close that gap between the current rate and the benchmark to average earnings and to make sure people on social welfare do not fall further behind.”

“This gives an indication of just how important social welfare rates are in protecting the most vulnerable in our society. We should not lose sight of this as we face into a period of potential economic upheaval”

Dr Healy said: “Poverty will rise if welfare rates do not keep pace with these changes in Budget 2020. This is why Social Justice Ireland is calling for an increase of €9 in minimum social welfare rates in Budget 2020.”

—————————————————————This article from the Irish Independent , including Statements by ICTU Pensions Officer, Dr Laura Bambrick, is an informative and accurate summary of the current impasse on contributory social welfare pensions. https://wp.me/pKzXa-1ma

ICTU submission and Government Policy Statement are also available below

Irish Independent: Plans to give pensioners more security are ‘being blocked in Government’

“The Department of Social Protection has informed us the delay in progressing the legislation is with Finance,” said Irish Congress of Trade Unions social policy officer DR Laura Bambrick.

When asked by Irish Independent if it is blocking the plan, a Department of Finance spokesperson said the query “is appropriate” to the Department of Social Protection.

Irish Independent, Anne-Marie Walsh, August 20 2019

Plans to ensure the State pension keeps its value are being blocked by a Government department, it has been claimed.

A senior union official, Pensions Policy Officer, Dr Laura Bambrick, ICTU,  said the Department of Finance is putting the brakes on proposals to give older people greater security.

This would be done by ensuring the value of the State pension never drops below the equivalent of 34pc of the average wage.

At the moment, the pension is not pegged to any economic markers – and pensioners are dependent on the goodwill of politicians at budget time for increases like the extra fivers given in recent years.

The Government has been urged to move on its commitment to link the pension with pay after missing its own deadline to roll out the proposal.

The Governments Roadmap for Pensions Reform said it would set a formal benchmark of 34pc of average earnings for the pension by the end of last year.

It also promised to roll out a process whereby payments would be “explicitly linked” to inflation and average wages in the same timeframe.

“The Department of Social Protection has informed us the delay in progressing the legislation is with Finance,” said Irish Congress of Trade Unions social policy officer DR Laura Bambrick.

She said its reluctance may be down to potential costs and a loss of power over budget priorities. It is vital the changes are brought in ahead of a planned auto-enrolment pension scheme in 2022, she added, so the public can be confident the Government does not plan to replace the State pension over time.

When asked if the deadlines were missed or why, the Department of Social Protection did not say.

In a response, it said it is “currently considering options” to implement benchmarking and indexation.

When asked if it is blocking the plan, a Department of Finance spokesperson said the query “is appropriate” to the Department of Social Protection.

The Government’s pensions roadmap highlighted a need to benchmark the pension to provide a “basic level of pension adequacy”.

It said current pension rates already meet this objective – but future increases should be linked to the cost of living and wage levels in order to ensure the value of the State pension is maintained.

“As pensioners generally have fixed incomes, and can expect 20 or more years when they may be at least partially reliant on the State pension, any uncertainty about future rates can cause anxiety, particularly among pensioners with no other source of income,” it said.

It said Ireland is atypical among EU countries by giving discretionary increases through political decisions in annual budgets.

“The Government believes a regime of automatic indexation would introduce greater long-term certainty for our retirees,” it said.

Meanwhile, pensioners have no idea how many years’ contributions they will need to qualify for a full State pension in future.

The department said it is designing a new “total contributions” approach for post-2020 pensioners and the minister will bring a proposal to government “in the near future”.

 

——————————————————————–

Government to Raid Worker and Employer Contributions to Fund which Pays Contributory Old Age Pensions and Unemployment Benefit to Pay Increases in Other Benefits and Alowances which Should Come from General Taxation

Irish Independent 28/0/2019  https://wp.me/pKzXa-1ma
“The (Budget) allocation for the Department of Social Protection is still being negotiated, but Mr Donohoe will target payments aimed at low-income families rather than broad welfare top-ups as occurred in recent years.”
This is just spin. There is no intention to impose a penny in tax on the assets of the top 10% of financial asset holders who now have 50 billion more than they had at peak boom level in 2006.

As the Consumer Price index is up 0.7% ( CSO) since last year all contributory benefits would have to be increased by 0.7%,  to retain their value. To provide no increase would be a cut.

The PRSI Fund has been in surplus for the past 3 years as confirmed to Seamus Healy TD in Dáil by the Minister. The surplus was transferred to the exchequer. This means that the the government raided the FUND  for other purposes

——————————————————————–Will Trade Unions Stand Idly By as Government Plans to Phase Out Contributory Old Age Pensions by Falsely Treating it as a Social Welfare Handout

https://wp.me/pKzXa-1ma

Contributory Old Age Pensions are funded by employee and employer contributions

Private and Public Service Pensioners who have both an occupational pension and a contributory old age pension are most at risk but not only these.

The phasing out is to be done by failing to raise the contributory old age pension in line with the cost of living in the budget each year.

The Minister for Social Protection has recently stated that only those below the Minimum Effective Standard of Living (MESL), a poverty threshold, should get annual increases

Irish Times: “Secretary General of the Department of Employment Affairs and Social Protection John McKeon noted that unlike private pension funds, the Social Insurance Fund does not operate on a prefunded basis whereby contributions made today would be invested to fund future disbursements. The fund operates on a ‘pay as you go’ basis with current year expenditure funded by current year revenues, he said, adding that deficits are funded by an Exchequer subvention paid form a central fund.”

Paddy Healy: “Mr McKeon failed to mention that when the fund has been in surplus as it was in  2016, 2017, 2018, government raids the fund for other purposes.”

 —————————————————————————————————————————————-

ICTU Submissions on Pension Changes and Government Documents  https://wp.me/pKzXa-1ma

Total Contributions Approach Consultation: Submission on behalf of ICTU…

https://www.ictu.ie/…/total_contributions_approach_submission_finaljune_ 2018.pdf

 

File Format: PDF/Adobe Acrobat

entitlement to the contributory pension, and agree in principle with a move to a Total ContributionsApproach. The key issues for Congress in switching to an …

 

Your Quick Guide to Government’s Proposed Changes to the Old …

https://www.ictu.ie/download/pdf/factsheet_pdf.pdf

File Format: PDF/Adobe Acrobat

principle with the move to a ‘Total Contributions Approach‘. However, Congress rejects a number of the rules and conditions being proposed and are actively …

Congress Concerned at Proposed Changes to State Pension …

https://www.ictu.ie/…/congress-concerned-at-proposed-changes-to-state-pe/

 

May 27, 2018  This option is to be withdrawn in 2020, when the Total Contributions Approach will be the only method of assessment available to applicants …

Pension Reform Plan ‘potentially significant’; Congress commits to …

https://www.ictu.ie/…/pension-reform-plan-potentially-significant-congre/

 

Feb 28, 2018  Congress General Secretary Patricia King said that “the plan to move to a Total Contribution Approach will go some way towards addressing …

initial response of the irish congress of trade unions to the oecd …

https://www.ictu.ie/…/congress_response_to_oecd_pensions_review_may_ 2013.pdf

File Format: PDF/Adobe Acrobat

The report – if acted on – will change Ireland’s approach to the welfare of older people. The …. total contributions approach from 2020 onward. • The best two …

Report of Executive Council

https://www.ictu.ie/…/14878_congressbdc_executive-report_r7_final.pdf

 

File Format: PDF/Adobe Acrobat

Jan 28, 2019  agrees in principle with the move to a ‘TotalContributions Approach‘. However, Congress rejects a number of the rules and conditions.

Auto-Enrolment Retirement Saving Scheme: Submission on behalf …

https://www.ictu.ie/…/auto_enrolment_submission_ictunov_2018.pdf

 

File Format: PDF/Adobe Acrobat

Congress recognises that the current voluntary approach to supplementary …. The Strawman proposes a total minimum contribution of 14 per cent of wage …

 ______________________________________________
For Written Answer on : 23/07/2019
Question Number(s): 2704 Question Reference(s): 32494/19
Department: Employment Affairs and Social Protection
Asked by: Seamus Healy T.D.
______________________________________________

QUESTION
To ask the Minister for Employment Affairs and Social Protection the outturn figures for the excess of receipts overpayments in the PRSI fund in each of the years 2016 to 2018; and if she will make a statement on the matter.

REPLY
This question is being answered on the understanding that it relates to the excess of Social Insurance Fund income over expenditure in the years 2016 to 2018.

The following table shows the excess of receipts over expenditure of the Social Insurance Fund for 2016, 2017 and 2018 (provisional):

 2016  2017  2018
 €m  €m  €m
 452.4  730.9  1,134.0

 

(Statements by the Minister and by Senior Civil Servants in the Articles below are Grossly misleading-PH)

Ageing population leading to ‘significant annual deficits’ in pension fund

Sorcha Pollak

 

Last Updated: Thursday, November 29, 2018, 16:07

Billions of euro may be needed in the near future to support and maintain the State’s pension fund as Irish people continue to grow older and live longer, the Dáil Public Accounts Committee (PAC) has heard.

Secretary General of the Department of Employment Affairs and Social Protection John McKeon told the meeting the State’s Social Insurance Fund was projected to suffer “significant annual deficits” in the coming decades with billions needed to prop up the scheme as increasing numbers retire and reach pension age.

While the fund is projected to have a surplus value of €2.8 billion by the end of 2018, Mr McKeon warned that the fund had run deficits in six out of 10 of the past years and that “during the great recession”, the total value of deficits amounted to €11 billion.

“This data indicates that the value of benefits paid by the fund greatly exceeds the value of contributions made into the fund,” said Mr McKeon, adding that the value of the State pension alone was worth more than the value of contributions made.

“For this reason, given the projected increases in the numbers of older people and increasing life expectancy, the actuarial review projects significant annual deficits in the future,” he said.

Thursday’s Dáil committee meeting examined the results of the latest actuarial review into the Social Insurance Fund which is conducted every five years to project the “likely evolution” of social insurance funding based on a “defined set of assumptions”.

In July, the Government warned the Irish pensions system was facing a number of “very serious demographic, adequacy and sustainability challenges” and that the Social Insurance Fund was forecast to accumulate a potential deficit of up to €335 billion over the next fifty years.

In its National Risk Assessment, the Government estimated that the number of people at State pension age and older would more than double from 586,000 in 2015 to 1,402,000 by 2055. It also warned that Ireland had a very low level of private pension coverage.

Comptroller and Auditor General Séamus McCarthy underlined to the PAC that the actuarial review was “a valuable exercise as it enables informed discussion about the expected long-term implications of current decision making”.

He warned that a “substantial” exchequer subvention would be required in the coming years to meet the spending costs of the insurance fund and that this cost would “increase rapidly”. The review estimates the insurance fund could need an additional €1.7 billion by 2025; an additional €5.6 billion by 2035 and an additional €11.4 billion by 2045.

Pay as you go

Mr McKeon noted that unlike private pension funds, the Social Insurance Fund does not operate on a prefunded basis whereby contributions made today would be invested to fund future disbursements. The fund operates on a ‘pay as you go’ basis with current year expenditure funded by current year revenues, he said, adding that deficits are funded by an Exchequer subvention paid form a central fund.

The Social Insurance Fund was set up to provide security to people currently in employment but who will experience periods out of employment including people in retirement, on illness leave and on maternity leave.

Most employers and employees over the age of 16 and under 66 pay PRSI (pay related social insurance) contributions into the fund and for this employees receive benefits for the periods they spend out of employment. The fund expenditure policy is set by the Minister for Social Protection and Minister for Public Expenditure and Reform.

© 2019 irishtimes.com

 

 

 

Will Trade Unions Stand Idly By as Government Plans to Phase Out Contributory Old Age Pensions by Falsely Treating it as a Social Welfare Handout?

Contributory Old Age Pensions are funded by employee and employer contributions

Private and Public Service Pensioners who have both an occupational pension and a contributory old age pension are most at risk but not only these.

The phasing out is to be done by failing to raise the contributory old age pension in line with the cost of living in the budget each year.

The Minister for Social Protection has recently stated that only those below the Minimum Effective Standard of Living (MESL), a poverty threshold, should get annual increases

Irish Times: “Secretary General of the Department of Employment Affairs and Social Protection John McKeon noted that unlike private pension funds, the Social Insurance Fund does not operate on a prefunded basis whereby contributions made today would be invested to fund future disbursements. The fund operates on a ‘pay as you go’ basis with current year expenditure funded by current year revenues, he said, adding that deficits are funded by an Exchequer subvention paid form a central fund.”

Paddy Healy: “Mr McKeon failed to mention that when the fund has been in surplus as it was in  2016, 2017, 2018, government raids the fund for other purposes.”

 

 

 

 

______________________________________________
For Written Answer on : 23/07/2019
Question Number(s): 2704 Question Reference(s): 32494/19
Department: Employment Affairs and Social Protection
Asked by: Seamus Healy T.D.
______________________________________________

QUESTION
To ask the Minister for Employment Affairs and Social Protection the outturn figures for the excess of receipts overpayments in the PRSI fund in each of the years 2016 to 2018; and if she will make a statement on the matter.

REPLY
This question is being answered on the understanding that it relates to the excess of Social Insurance Fund income over expenditure in the years 2016 to 2018.

The following table shows the excess of receipts over expenditure of the Social Insurance Fund for 2016, 2017 and 2018 (provisional):

 2016  2017  2018
 €m  €m  €m
 452.4  730.9  1,134.0

 

(Statements by the Minister and by Senior Civil Servants in the Articles below are Grossly misleading-PH)

Ageing population leading to ‘significant annual deficits’ in pension fund

Sorcha Pollak

 

Last Updated: Thursday, November 29, 2018, 16:07

Billions of euro may be needed in the near future to support and maintain the State’s pension fund as Irish people continue to grow older and live longer, the Dáil Public Accounts Committee (PAC) has heard.

Secretary General of the Department of Employment Affairs and Social Protection John McKeon told the meeting the State’s Social Insurance Fund was projected to suffer “significant annual deficits” in the coming decades with billions needed to prop up the scheme as increasing numbers retire and reach pension age.

While the fund is projected to have a surplus value of €2.8 billion by the end of 2018, Mr McKeon warned that the fund had run deficits in six out of 10 of the past years and that “during the great recession”, the total value of deficits amounted to €11 billion.

“This data indicates that the value of benefits paid by the fund greatly exceeds the value of contributions made into the fund,” said Mr McKeon, adding that the value of the State pension alone was worth more than the value of contributions made.

“For this reason, given the projected increases in the numbers of older people and increasing life expectancy, the actuarial review projects significant annual deficits in the future,” he said.

Thursday’s Dáil committee meeting examined the results of the latest actuarial review into the Social Insurance Fund which is conducted every five years to project the “likely evolution” of social insurance funding based on a “defined set of assumptions”.

In July, the Government warned the Irish pensions system was facing a number of “very serious demographic, adequacy and sustainability challenges” and that the Social Insurance Fund was forecast to accumulate a potential deficit of up to €335 billion over the next fifty years.

In its National Risk Assessment, the Government estimated that the number of people at State pension age and older would more than double from 586,000 in 2015 to 1,402,000 by 2055. It also warned that Ireland had a very low level of private pension coverage.

Comptroller and Auditor General Séamus McCarthy underlined to the PAC that the actuarial review was “a valuable exercise as it enables informed discussion about the expected long-term implications of current decision making”.

He warned that a “substantial” exchequer subvention would be required in the coming years to meet the spending costs of the insurance fund and that this cost would “increase rapidly”. The review estimates the insurance fund could need an additional €1.7 billion by 2025; an additional €5.6 billion by 2035 and an additional €11.4 billion by 2045.

Pay as you go

Mr McKeon noted that unlike private pension funds, the Social Insurance Fund does not operate on a prefunded basis whereby contributions made today would be invested to fund future disbursements. The fund operates on a ‘pay as you go’ basis with current year expenditure funded by current year revenues, he said, adding that deficits are funded by an Exchequer subvention paid form a central fund.

The Social Insurance Fund was set up to provide security to people currently in employment but who will experience periods out of employment including people in retirement, on illness leave and on maternity leave.

Most employers and employees over the age of 16 and under 66 pay PRSI (pay related social insurance) contributions into the fund and for this employees receive benefits for the periods they spend out of employment. The fund expenditure policy is set by the Minister for Social Protection and Minister for Public Expenditure and Reform.

© 2019 irishtimes.com

 

 

 

 

 

EARLIER MESSAGE

All Pensioners on Contributory and Non-Contributory Social Welfare Old Age Pensions To Be Confined to Minimum Essential Standard of Living in their Old Age After A lifelong Contribution to Irish Society According to Minister Regina Doherty: All State pensions should not be equal, says Minister

Shocking Threat To Old Age Pensions By Fine Gael Minister https://wp.me/pKzXa-1ma
Minister says welfare system ‘not working’ for many and needs to be changed (At Cost to “Better Off” Social Welfare Recipients-PH) It is not “fair” that some older people receive State pensions that are more than they need while others on the same amount live in poverty, Minister for Social Protection Regina Doherty has said. Ms Doherty said she wants to reform the welfare system and bring an end to €5 top-ups on every welfare payment being announced on budget days.
Kitty Holland , Irish Times: Saturday, July 6, 2019, 01:00

Full Holland Article Here  https://wp.me/pKzXa-1ma

Pensioners with Occupational Private Sector Pensions and Occupational Public Sector Pensions as well as contributory PRSI Pensions being targeted by FG /Ind Alliance Government

—————————————————————-Minister says welfare system ‘not working’ for many and needs to be changed (At Cost to “Better Off” Social Welfare Recipients-PH)

It is not “fair” that some older people receive State pensions that are more than they need while others on the same amount live in poverty, Minister for Social Protection Regina Doherty has said.

Ms Doherty said she wants to reform the welfare system and bring an end to €5 top-ups on every welfare payment being announced on budget days.

Kitty Holland , Irish Times: Saturday, July 6, 2019, 01:00

The welfare system is not “working” for thousands of households living in poverty, and radical change to systems is needed, Minister for Social Protection Regina Doherty has said. Signalling an intention to end traditional across-the-board welfare increases on budget day, the Minister said she wanted a far more targeted approach to guarantee a minimum basic income for everyone.

“As a society we would like to ensure that everybody has at least a floor which they will never go under,” she said.

Speaking on the fringes of her department’s pre-budget forum, at which advocacy groups set out their “asks” for the budget in October, Ms Doherty argued that the welfare system should guarantee a minimum essential standard of living (MESL) for everyone.

The MESL for six household “types”, in rural and urban settings, is calculated annually by the Vincentian Partnership for Social Justice. The adequacy of welfare payments to meet this is assessed, with shortfalls recorded as “adequacy gaps”.

This year’s report finds the deepest income inadequacy is “now exclusively found in households headed by one adult, ie single working-age adult and lone-parent households, or in households with older children”.

A single parent of two children – one in primary school and one in secondary, on welfare and living in a town – will need €428.50 per week for a MESL, but gets only €358.90 – an “adequacy gap” of €69.60.

The same family in a rural location needs €500.44 a week, gets the same as the urban family, and struggles with an “adequacy gap” of €141.53.

Pensioner couple

In contrast, an urban pensioner couple dependent on welfare needs €314.60 a week for a MESL, but gets €425.82 – €111.22 more than they need. The same couple in the countryside needs €386.11, gets the same as the urban couple, and so has €39.71 more than they need each week.

“These issues raise important questions about the relativities between social welfare rates,” says the report.

Ms Doherty said a new approach, if achieved, would require systems change, legislative change and political as well as societal “buy-in”. It would not happen in one budget cycle, she said, but she wanted discussions on moving towards such an approach.

“It’s not about deserving more or less because everyone deserves an essential standard of living. But if you live in an area where you have public transport outside your door and can get on your bus with a free travel card well then you don’t have that cost…whereas if you live in Glenroe and you have no public transport and you have to have a car or a bicycle [your costs are higher].”

Levels of poverty

She said it could be administratively onerous, but this was not a reason to ignore the persistent levels of poverty among some groups – particularly lone-parent families and households headed by people with disabilities – despite welfare increases and a recovering economy.

“When you break it down there are some who are taking more than a minimum essential living standard from the State but there are a lot of people who are not….So there is a whole different variety of circumstances that need to be looked at, that doesn’t get addressed when you give everybody the same, across-the-board, because you still leave the people at most risk behind.”

© 2019 irishtimes.com

All State pensions should not be equal, says Minister

Kitty Holland

 

Last Updated: Saturday, July 6, 2019, 01:00

It is not “fair” that some older people receive State pensions that are more than they need while others on the same amount live in poverty, Minister for Social Protection Regina Doherty has said.

Ms Doherty said she wants to reform the welfare system and bring an end to €5 top-ups on every welfare payment being announced on budget days.

She said everyone should have a basic minimum income guaranteeing that they can participate in society but that the current system was not delivering this.

The Minister said “if we are really serious about everybody enjoying the benefits of a recovering economy, well then we need to look at those who are most at risk of poverty and the people in consistent poverty as opposed to just doing a little bit for everybody”.

The same payments for similar households in different parts of Ireland may not be appropriate, she said, adding that political and public “buy in” would be needed to explain to the “lady in Donegal” why she was going to get “more, or less” than “the lady somewhere else” in the State.

“So a long conversation will be needed,” she said, adding that the changes would not be achieved in one budget cycle.

Ms Doherty said that despite a recovering economy and increases in welfare payments, 120,000 children still lived in consistent poverty, while some welfare recipients were getting more than they needed, including pensioner couples in urban areas.

“It’s not just about the rates. It’s about ensuring everyone has a minimum standard of living. What we have at the moment is people being left behind because we’re quite happy to leave everybody the same and everyone is not the same.”

© 2019 irishtimes.com

 

Categories: Uncategorized
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: