At current levels the Government would need to increase the pension by €40 to reach its own commitment to benchmark
ALONE has said that Government must fulfill their commitments to benchmark the State Pension to average earnings and inflation in the next Budget.
The charity says that increasing poverty rates among older people are a direct result of Government failure to benchmark the pension as committed to in Government policies.
Multiple Government reports, including the Roadmap for Social Inclusion and the Roadmap for Pensions Reform have outlined the benefits and reasons in favour of benchmarking. Page 39 of The Roadmap for Social Inclusion 2020-2025 reads, “…this Government has committed to the introduction of a system of benchmarking rates of pension payment both to average wages and to inflation”.
ALONE CEO Seán Moynihan said, “We welcomed Government commitments made last week to increase the pension in the forthcoming Budget, but the commitment to benchmark the pension was clearly set out in the Roadmap for Social Inclusion. In fact, there was a commitment to apply the benchmark in adjusting Pension changes for Budget 2021.”
The Taoiseach Leo Varadkar said in Leaders’ Questions last week that he was not exactly sure about Government commitment to benchmarking. However, the Taoiseach also wrote a foreword to the Roadmap for Social Inclusion and co-signed the foreword to the Roadmap for Pensions Reform 2018-2023, both of which contained the commitment to set a formal pensions benchmark.
“At ALONE, we believe that older people should be provided with a reasonable income, and this should not be influenced by the timing of elections, or used as a political football every year. This is the income that older people use to stay warm, fed and well,” Moynihan continued.
“For the pension to reach 34% of average wages, which was the benchmark outlined by Government, it needs to be increased by €40. Some officials may feel this is an unreasonable request. The reality is that a third of older people living alone were at risk of poverty last year and we are asking for Government to implement the target that they themselves have set. We have previously asked for benchmarking of the Pension to be implemented over the course of two Budgets, so that the increase in cost is more gradual – therefore it is fair to say that an increase to the pension of less than €25 in the Budget will represent a missed opportunity. Social Justice Ireland’s recommendation of an additional €25 on core social welfare rates is welcome, and we believe is in fact a minimum requirement. Furthermore, increasing the State Pension is not just an investment in older people but an investment in our local economy, as much of the spending stays local.”
He concluded, “Implementing pension benchmarking is an opportunity for Government to make a real and long-term impact on the lives of older people today, and all of us as we get older. If Government is backing down from its commitment to implement benchmarking of the pension and other social welfare payments, we ask that this is acknowledged and explained in an open forum.”
ALONE’s full Pre-Budget Submission will be developed and delivered in response to a national survey among older people who use their services.
CSO-SILC data for 2022 shows that more than 1 in 3 people aged 65+ living alone are at risk of poverty, the highest rate of all households surveyed. By age group, the largest year on year change in the at risk of poverty rate was in persons aged 65+, going from 11.9% in 2021 to 19.0% in 2022.
 The median equivalised disposable income in SILC 2022 was €26,257, representing an increase of €993 (3.9%) from the previous year. The corresponding at risk of poverty threshold (i.e. 60% of the median) stood at €15,754 in SILC 2022 https://www.cso.ie/en/releasesandpublications/ep/p-silc/surveyonincomeandlivingconditionssilc2022/equivalisedincome/