Tax breaks to “wealthy individuals” who take out private pensions should be “reviewed” as one measure to address inequalities in the State pension introduced six years ago, according to a coalition of older people’s and women’s organisations.
Age Action Ireland, the National Women's Council of Ireland, the Irish Countrywoman's Association, as well as trade unions Siptu and Forsa, say a measure, introduced in 2012 by then Minister for Social Protection Joan Burton, has hit over 48,000 older people who took time out of the workforce any time since 1968. Forsa represents over 80,000 public service workers.
Time out could have been for such reasons as caring responsibilities, to pursue further education or to start their own business.
It exacerbates a situation whereby many women’s pension entitlements were already adversely affected due to time out for care work, and has cost those affected between €30 and €80 per week, say those campaigning for it to be reversed. The numbers affected are likely to grow by about 10,000 a year if the anomaly is not addressed.
Minister for Social Protection, Regina Doherty, is bringing proposals to Cabinet on Thursday to address the situation. A protest is taking place outside Leinster House on the issue, on Thursday also.
In 2012 the number of payment bands, calculated on the basis of the average number of PRSI contributions a person has made annually, was increased from four to six. Those with the highest number of average annual contributions got the higher pensions. The introduction of two additional bands hit those in the middle ranges hardest.
Among those affected is Joan McLoughlin (72) from Naas, Co Kildare, who worked in the then Department of Local Government (now Housing) from 1964 until 1972. She left due to the marriage bar after which she worked on the family farm and raised three children. In 1994 she started a farm accommodation business and pays her own PRSI.
She applied for the contributory State pension in late 2012, weeks after the changes came into effect. She was told she would be entitled to €155.20 per week, compared to a full rate of €238.30. She was “fuming, full of disbelief”.
She is “lucky” she says because she can still work, but says: “It is totally wrong and unfair. I raised three kids, did a good job and this is the thanks I get.”
A campaign press briefing on the issue on Wednesday, hosted by the coalition, was also attended by about 10 TDs, mainly from Fianna Fáil, People Before Profit, the Social Democrats and Independents. All said the issue was a constant at their constituency clinics.
Undoing the 2012 changes, and restoring the full pensions to those who applied since 2012, would cost about €70 million this year, and €10 million per year thereafter, say the campaigners.
Justin Moran, head of advocacy with Age Action Ireland, speaking on behalf of the coalition, called on "the State to forgo tax breaks for big private pensions to break the inequity and ensure a fair and equitable State pension".
The NWCI said it was a “possible solution” to offset the costs of reversing the 2012 changes.
