Budget win for pensioners as Heather Humphreys seeks €15 a week pension increase, while pushing back on Jobseeker’s rise

[faketales]

You are correct, the %s should have been €s -senior eyesight. I have corrected my post.

Whatever about future pensioner figures, the number of COAP figures at Quarter 2 (see page 11) is 522,270.

Thus, in calculating the additional cost of increasing the COAP for 2025, current figures must be used.

Regarding future pensions, although demographics can be projected far into the future within a reasonable margin of error (baring catastrophes, unusual migration or fertility, etc.,), domestic and global economic conditions are far less predictable and so governments usually go for 5-year, or less commonly, ten-year cycles when formulating policies.

For instance, government economic policies might increasingly factor in climate change, but could they predict a global pandemic or a protracted war that affects essential supply chains?

In fairness, reforms are being introduced - gradually to avoid cliff edges – inter alia, raising the pension age and increasing employee/employer PRSI contributions.

At the end of the day all policies are a balancing act between competing needs.

I think that last line is doing a lot of work. Short time needs almost always triumph over long term, even if those long term are greater. Just look at climate change.

I see the impending pension issues much like our housing issues, as very predictable. Yes the scale maybe unexpected due to higher levels of immigration but allowing our construction sector to almost disappear always meant a slow ramp up. The "failure" is built in before it ever occurs. Similar will happen with pensions, by the time action becomes obvious it will be too late.

 

[Deiseblue]

Why are they afraid?...Mostly irrational, whilst the cost of heating isn't that expensive, considering most of them have v little outgoings.

It’s extremely presumptuous to consider most pensioners have very little outgoings .
As fit and healthy pensioners my wife and I spend a considerable time travelling as do most of my similarly aged friends.
Eating & drinking well and gambling sensibly doesn’t come cheaply either nor does driving up to date cars .
When people retire they don’t simply retreat behind closed doors , put on slippers , sip endless cups of tea and save for their funerals .

 

[Purple]

Don't agree - firstly most people dont live to 105 years of age. After 40 years working I will feel I have done my bit and will want to get off the hamster wheel. Doesnt mean I dont plan to be productive or contribute to society after 65. I plan to be very active helping others with voluntary works for charities, hospices etc. Think my soul and phsychee will get much more out of that than me turning up for paid office work.

And that's fine as long as you don't expect other people to pay for it.

 

[joe sod]

This is what we are heading for and along with AE will reduce help reduce the government's pension costs.
The Australian system take both income and assets into account:

Government Age Pension eligibility

There are three criteria you need to meet. You’re eligible if you’re 65-67 years, an Australian resident, and pass an income and assets test.

aware.com.au

Yes but Australia has proper investment funds and tax free ISAs etc along with everyone having their own individual pension fund invested , so their prsi payment goes into that not into a general social fund that pays out employment benefits, non contributory pensions, child benefits etc to the entire population. Sure ireland still hasn't introduced auto enrollment and has no ISA accounts.
Therefore ireland would only be in a position to go the Australian route after maybe 30 years of auto enrollment and ISA accounts. They cannot means test a pension which people have been paying into all their working lives when the state has not set aside an actual fund for this

 

[Purple]

I always found it strange that the contributory State Pension is given at a particular age rather than after a certain number of years in the workforce. It seems unfair that someone that started work at 16 gets their pension at the same age as someone who started work at 26.

 

[Towger]

I always found it strange that the contributory State Pension is given at a particular age rather than after a certain number of years in the workforce. It seems unfair that someone that started work at 16 gets their pension at the same age as someone who started work at 26.

It is worse than that. Under the Averaging system the person stating off at 16 can receive less than the person who started at 26, as their greater number of years reduces their average.
As things now stand you hold off drawing down your Contributory State Pension untill you are 70. But you need to live to 87/88 for it to be beneficial and will continue paying Class A PRSI until drawdown.

 

[Towger]

Yes but Australia has proper investment funds and tax free ISAs etc along with everyone having their own individual pension fund invested , so their prsi payment goes into that not into a general social fund that pays out employment benefits, non contributory pensions, child benefits etc to the entire population. Sure ireland still hasn't introduced auto enrollment and has no ISA accounts.
Therefore ireland would only be in a position to go the Australian route after maybe 30 years of auto enrollment and ISA accounts. They cannot means test a pension which people have been paying into all their working lives when the state has not set aside an actual fund for this

It won't be today or tomorrow. Don't forget, AE was supposed to be implemented years ago.

 

[charlie007]

It is worse than that. Under the Averaging system the person stating off at 16 can receive less than the person who started at 26, as their greater number of years reduces their average.
As things now stand you hold off drawing down your Contributory State Pension untill you are 70. But you need to live to 87/88 for it to be beneficial and will continue paying Class A PRSI until drawdown.

Or can (could have) receive more if they continued working.

 

[Sophrosyne]

It is worse than that. Under the Averaging system the person stating off at 16 can receive less than the person who started at 26, as their greater number of years reduces their average.
As things now stand you hold off drawing down your Contributory State Pension untill you are 70. But you need to live to 87/88 for it to be beneficial and will continue paying Class A PRSI until drawdown.

That method is changing. See Changes to the State Pension (Contributory) in Ireland

“From January 2025 there will be a 10-year phased removal of the Yearly Average Method, which means that all pensions will be calculated using only the Total Contributions Approach (TCA) by 2034.

During the 10-year transition period, pensions will be calculated using two methods:

Method 1: The Total Contribution Approach (TCA) will be used to determine a rate of payment. If you will receive the maximum State Pension contributory rate using this calculation, no further calculation is necessary.

If you would receive less than the maximum State Pension (Contributory) rate using the TCA, the Department will consider a rate using Method 2.

Method 2: A rate of payment using a Yearly Average calculation will be determined. A proportion of this Yearly Average rate will then be combined with a proportion of a TCA rate to determine the rate of State Pension Contributory payable to you.

Having compared the outcome of Method 1 and Method 2, the most favourable rate will be awarded to you.”

 

[redstar]

I wouldn't pay too much attention to headline grabbing increases in this or that for <group name here>.
The Finance bill usually has the real and not always popular changes - but flies under the hype radar.

 

[joe sod]

It won't be today or tomorrow. Don't forget, AE was supposed to be implemented years ago.

I'm aware of that, but the basis of the Irish state pension is that it is a benefit accrued through 40 years of prsi payments. It is fundamentally different to Australian system, denying a person this when they have been paying in over their working life and when the state hasn't set up a separate individual pension fund for them would be breaking a fundamental principle of paying tax and social payments. Australia and UK also have completely free health care at point of contact, for residents, we don't. Therefore the reason that person is prepared to work and pay tax all their lives is that they know the state will give back when they retire

 

[Purple]

Or can (could have) receive more if they continued working.

As things stand a person who started work at 16 and retires at 66 get a smaller state pension than someone who starts work at 26 and retires at 70. That doesn't seem fair.

 

[Forumuser]

As things stand a person who started work at 16 and retires at 66 get a smaller state pension than someone who starts work at 26 and retires at 70. That doesn't seem fair.

That is not true anymore since the introduction of the TCA system.

 

[charlie007]

That is not true anymore since the introduction of the TCA system.

And even if it was, there's surely an advantage in starting at 66 rather than 70

 

[Purple]

That is not true anymore since the introduction of the TCA system.

But if you defer you date of retirement until you are 70 your pension is €337.20. If you retire at 66 it's €277.30. All you need it to have worked for 10 years (which is a ridiculously short amount of time to have to work to qualify).

Therefore someone who did a PhD, funded by the taxes from a person who started work at 15, and didn't start work until they were 35 and pops in and out of paid employment, amassing 10 years of contributions over the next 35 years, will get a larger pension than the poor schmuck who worked every year for 50 years.

 

[charlie007]

But if you defer you date of retirement until you are 70 your pension is €337.20. If you retire at 66 it's €277.30. All you need it to have worked for 10 years (which is a ridiculously short amount of time to have to work to qualify).

Therefore someone who did a PhD, funded by the taxes from a person who started work at 15, and didn't start work until they were 35 and pops in and out of paid employment, amassing 10 years of contributions over the next 35 years, will get a larger pension than the poor schmuck who worked every year for 50 years.

Hmmmmm...I might get back to you on that? Then again

 

[clinteastwood]

It’s extremely presumptuous to consider most pensioners have very little outgoings .
As fit and healthy pensioners my wife and I spend a considerable time travelling as do most of my similarly aged friends.
Eating & drinking well and gambling sensibly doesn’t come cheaply either nor does driving up to date cars .
When people retire they don’t simply retreat behind closed doors , put on slippers , sip endless cups of tea and save for their funerals .

Indeed, and great to hear. But don't expect taxpayers to subside the lifestyle you've become accustomed to!

 

[Forumuser]

But if you defer you date of retirement until you are 70 your pension is €337.20. If you retire at 66 it's €277.30. All you need it to have worked for 10 years (which is a ridiculously short amount of time to have to work to qualify).

Therefore someone who did a PhD, funded by the taxes from a person who started work at 15, and didn't start work until they were 35 and pops in and out of paid employment, amassing 10 years of contributions over the next 35 years, will get a larger pension than the poor schmuck who worked every year for 50 years.

Not true either.
The person who pops in and out of employment and amasses 10 years of contributions gets only the minimum pension- much less than the person who worked every year for 50 years.
You need to check out again the changes in the pension system which occurred in the last few years. You also need to check what is coming as of January,1st, next year.

 

[Deiseblue]

Indeed, and great to hear. But don't expect taxpayers to subside the lifestyle you've become accustomed to!

Too late Clint , in this case I am feeling lucky!
In addition to my defined benefit pension from my employer , a job I retired from at age 52 I now receive the full contributory pension & confidently expect further good news in the budget .
I should point out that I too am a taxpayer paying the highest rate and you & I both know that the OAP is only going one way in my remaining time on Earth and that way is up .

 

[faketales]

Too late Clint , in this case I am feeling lucky!
In addition to my defined benefit pension from my employer , a job I retired from at age 52 I now receive the full contributory pension & confidently expect further good news in the budget .
I should point out that I too am a taxpayer paying the highest rate and you & I both know that the OAP is only going one way in my remaining time on Earth and that way is up .

Simon needs to clarify when the election will be. Many retirees have an October getaway booked a long time ago and will now be planning for a few weeks in the Canaries for early in the new year.