From Socialist Voice, November 2010

State pensions are deferred wages—not a privilege


The state pension is a cornerstone of our society, the product of more than a century of hard-fought battles. Working people have always viewed the state pension as a reflection of general solidarity and as part payment for deferred wages over a lifetime of work. We all contribute towards this basic lifeline, not only through PRSI and income tax but also through the essential roles we play in our families and communities.
     Today’s older people not only supported their parents’ generation but also provided for the education and health needs of those of working age today: volunteering, caring for partners, caring for grandchildren, running local groups and community organisations.
     Most if not all of this work goes unrecognised but is of enormous value to society.

The state pension is a fair and equitable use of public money

• For the majority of older people, social transfers, including the state pension, are their only or main source of income.
• €4.3 billion is the annual cost of funding the state pension.
• Without this payment, 84 per cent of older people are at risk of poverty.
• €3 billion is the annual cost of providing public support to private pension systems.
• High earners receive tax relief at a higher rate than those on lower incomes.
• 80 per cent of tax relief goes to the top 20 per cent of earners.

A pension for living with independence and dignity is a democratic right

• Fewer than half of all private-sector workers have a company pension.
• Losses of up to 38 per cent in private pensions mean that more people than ever will be relying on the state pension in the future.
• In 2007, 73 per cent of older people were dependent on social transfers, including the pension, for three-quarters or more of their household income.
• The state pension protects 84 per cent of those between 64 and 75 and 89 per cent of those over 75 against risk of poverty.

The real value of the state pension has been eroded in recent times

• Government policies are eroding the real value of the state pension through additional costs, such as carbon tax, dental charges, and prescription charges.
• Any cuts to associated supports, such as household benefits, fuel allowance, community care, or local transport, would further erode the value of the pension.
• Of those receiving the contributory state pension, slightly more than half receive the full rate, while the remainder receive a reduced rate. In fact 24 per cent receive less than €150 per week, and 10 per cent receive less than €100 per week.
• The loss of the Christmas bonus represents a cut in income of 2 per cent for those receiving the state pension.
[EMC]

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