From Socialist Voice, July 2005

The poverty of pensions

Ireland at present has one of the worst state pension systems in the western world, now providing less than a paltry one-third of average pre-retirement earnings. Under present state provisions, two-thirds of old people are at risk of poverty because of their dependence on such meagre provision.
    Indeed this is likely to be exacerbated, with the number of people over the age of 65 expected to rise by 85 per cent by 2026. Close to half the present work force, therefore—nearly a million people—will have no other source of pension provision than whatever they will get from the state.
    The “solution” of the Minister for Social and Family Affairs, Séamus Brennan, is to place more stress and strain on an already overworked, debt-ridden working population by further diminishing their income through introducing an element of compulsion to the pension system, and extending the retirement age to over 65. At the same time, however, Brennan is quite happy for the minority of those who can actually afford a private pension to be facilitated by state tax relief—which itself costs the state almost as much as its provision for old-age pensions!
    At present the government spends €1.6 billion per year on the state-funded pension system. Simultaneously, the tax relief system designed to aid private pension-holders costs around €1.5 billion, thus making the state pension scheme cater disproportionately for higher-income earners. The result of such practices is that a large amount of public resources, which could be used to bolster the present state scheme, is being simply thrown away for the benefit of well-off citizens, who are already doing quite well for themselves.

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