State Pension costs unsustainable?


#21

Why are you quoting my post?

You’re ranting, again.


#22

Young carry the can for elderly in recessionary squeeze

irishtimes.com/news/social-a … -1.1495391

Analysis: Seniors got more from the boom and have given less back as belts tightened in the bust


#23

Cut the SW pension for anyone that has a private pension in excess of 50K pa.
If they have a pension of this size it is hoghly likely they already received very significant tax breaks to build up this level of pension.


#24

Two problems with this:

(1) They’re already paying significant income tax on the private pension
(2) If you remove the state pension altogether there’s even less reason for people to save

The unintended consequence will be people opting out of private pension funds and buying property as a pension instead. Is that what you want?


#25

This report tracks Social Protection expenditure in 2012. Pensions are the largest cost.

audgen.gov.ie/documents/annu … pter16.pdf


#26

I don’t approve of arbitrary raging against older people either - after all this is the generation who didn’t have the benefit of free third level education or in many cases free second level education and although some are wealthy, many or not and are getting by just on the pension after a lifetime of working and paying taxes.

However your suggestion that increased unemployment is the main cause of unsustainable spending on social welfare isn’t correct either. The facts are thanks to Fianna Fáil’s liberalising of access to social welfare thoughout their time in government, failure to address anomalies in the system and rising social welfare rates the level of spending was already sustainably high at the height of the boom and only affordable in the context of boom time finances not even in the context of ordinary economic growth.

According to the ESRI ( media.tcm.ie/media/documents/e/e … tDec12.pdf) one fifth of the working age population were claiming benefits in 2006. This means that Ireland had the highest rate of welfare dependency in Europe at the time.

Unemployed people made up a small proportion of those dependent on social welfare in 2006, the main contributors were:

  • lone parent’s allowance
  • Widow’s pension
  • disability benefit.

Claiming of these benefits hasn’t fallen during the bust it has risen and a substantial proportion of claims are due to anomalies in the system which successive government’s have proved unwilling to address.

For instance, until recently Ireland was the only country in Europe where parents (mainly mothers in practice) were allowed to claim this benefit until their youngest child was 18 with no obligation to see work. This could mean that a claimant could have a child at 18 and another one at 36 and get to the age of 54 having spend most of their adult life on benefits without every being obliged to see work. Joan Burton was brave enough to bring the age limit down to seven years, but Fianna Fáil’s recent budget proposal commits them to reversing this. Proof if proof were needed that FF have learned nothing from the boom and bust.

Ireland has one of the highest levels of dependence on disability benefit in Europe. Why? Did we have a major war in the recent past which led to mass injuries or are we less well nourished than our European neighbours? No - the reason is that once disability allowance is paid out the claim is never reassessed by a physician independent of the claimant. This makes eminent sense for someone with a chronic illness such as MS or an inherited one such as Down’s syndrome, but it makes no sense in the case of the many thousands of people who are receiving disability due to depression, back trouble etc.

Finally, the contributory widows’ pension which is a particular bugbear of mine. Spending on this benefit is surprisingly high because access is determined on the basis of the spouse’s social insurance contributions, but there in no time limit on the period of the claim, except reaching the age of 65 and hence qualifying for more benefits. A relative of mine sadly lost her husband in her 30s. She is now in her late 50s and has been claiming the widows pension ever since, despite having always worked full time in a professional job. Rather ironically she used the money to speculate in property during the boom, but that is another story. But how can the government consider cutting old age pensions while failing to address overspending such as this on social welfare? Remember there is a means tested widows’ pension for those with no source of income so I am not implying that people who have no other means of support should be denied it.


#27

your dead wrong , the majority of pensioners draw down far more than they ever contributed in PRSI

this is due to the astounding increase in the state pension since 1997


#28

Fears for sustainability of Irish State pension

irishtimes.com/business/pers … -1.1972096


#29

Yep - elephant in the room which has been consistently ignored by governments for a long time.


#30

From listening to the elder advocacy quangcharties like “Older and Bolder” you would think that we are not in the top 50 of adequacy.


#31

pensioners are the most cosseted section of Irish society, you cannot touch their entitlements because the vote, this wont change anytime soon.


#32

mcwilliams has an interesting take on this

independent.ie/opinion/colum … 83323.html

its a debate that will need to be had at some stage as costs grow


#33

Maybe emigrants like me will be the only ones benefitting from contributions paid to their state pension in Ireland.

According to citizensinformation.ie/en/so … broad.html my contributions to the Irish system have to be recognised in the country I moved to. It could be that Ireland won’t have the money to pay my pension but Germany despite its future huge population of OAPs will(touch wood).


#34

Hope your ok to live out your final days in Thailand so…

theguardian.com/world/2012/dec/26/german-elderly-foreign-care-homes


#35

That report concerning care for the elderly has nothing to do with this topic of pensions. Re-animate viewtopic.php?f=4&t=62389&p=768669&hilit=german+elderly+foreign+care+homes#p768669 if you want to talk about that non-story.


#36

defined benefit pensions for NAMA staff: Bad.
defined benefit pensions for direct State employees: Good


#37

Producing accurate estimates of pensioner numbers for future years is actually quite easy, at least in the medium. For example, those that will start to claim Irish pensions in 10 years time are alive today somewhere in the world. Almost all of these will be currently living in Ireland.

Pensioners tend not to migrate with the same frequency as younger folk.

Life expectancy changes only slowly. So current life expectancy numbers can be used.

The population numbers in 2014 come from cso.ie/px/pxeirestat/Statire … Language=0.

The death rates come from the latest Irish Life Table which is the Irish Life Tables No. 15 2005-2007 and is available at cso.ie/en/media/duplicatecso … shlife.pdf.

It is not as if this problem has not been so clearly obvious for some time. It is also interesting to note that the article focuses on the cost of the state contributory pension but omits the issue of public service pensions the cost of which is almost as large. The cost of public service pensions in 2014 will be €2.872 billion – see databank.per.gov.ie/Expenditure. … p=GrossVGA. This figure excludes pensions of local authorities and semi-states. The amount being paid in public service pensions is almost as great for a smaller number of pensioners who have the same age profile.

None of these pensions are properly funded. They are largely paid from taxes.

The results will be very accurate for at least the next 15 or so years. Beyond this interval, future changes in life expectancy and migration of those 50 and under will start to have an effect.

Estimating state pension costs is slightly more difficult because:

• There are two pensions: contributory and non-contributory. Non-contributory pensions are means-tested and not available to all. Self-employed with a personal pension (the bit left after that Noonan’s thieving and the PRSI self-employed pay that is simply another tax to fund other’s unfunded pensions) may not qualify. If the numbers of self-employed have increased, then this will affect the numbers eligible for the non-contributory pension.

• There are different state pensions paid to single people and married couples. Social changes such as divorce may be leading to an increase in the overall proportion of single pensioners which will lead to a disproportionately large increase in pension costs.

However, producing realistic estimates is not beyond the capabilities of policy makers should they wish.

The issue is not just one of state pensions – contributory and non-contributory. The issue of public service pensions is almost as great. T

This shows the estimated numbers aged 66-99 in the years 2014 to 2025:

It is like a scary Ebola virus spreading graphic only this one is real.

The figures aged 99 are not accurate as the CSO only has population numbers classified as 99 and older while mortality rates are produced up to age 105. The error is trivial and reduces over time.

One potentially useful metric that can be derived from this is an estimate of the number of “pension years”, that is the number of years all pensioners are likely to claim a pension for. So, for example, the pensioners of 2014 are likely to claim for a total of 10,006,212 years. In 2014, there are 20,649 males aged 66 years. Each is likely to live for an average of 15.83 years giving rise to 326,874 pension years. In 2014, there are 20,752 females aged 66 years. Each is likely to live for an average of 18.96 years giving rise to 391,505 pension years.

The number of pension years represents a simple metric of the pension liability.

The estimated numbers of those of pension age in these years is:

   Year      Numbers Aged 66-99      % Increase
    2014                 544,261
    2015                 559,250           2.75%
    2016                 574,602           2.75%
    2017                 589,773           2.64%
    2018                 604,880           2.56%
    2019                 621,299           2.71%
    2020                 636,464           2.44%
    2021                 652,645           2.54%
    2022                 668,102           2.37%
    2023                 684,105           2.40%
    2024                 700,207           2.35%
    2025                 715,904           2.24%

The bulge is getting bulgier.

The issue of numbers of those of pension age also gives rise to secondary and tertiary concerns relating to healthcare and property.

Meanwhile much time is being devoted to the exafuck of Irish Water and the few hundred a year these costs represent.


#38

Nice graphic, ChickenParmentier. Scary :open_mouth:


#39

Cuts to State pension ‘must be considered’

irishtimes.com/business/econ … -1.2049998

Workers relying on ‘reformed’ State pension may face a bleak retirement

irishtimes.com/business/econ … -1.2049796


#40

2013 Social Insurance Fund figures were out yesterday so I’ll update with latest Pension figures for 2013

DSP audgen.gov.ie/documents/annualre … Vote37.pdf
SIF welfare.ie/en/downloads/sif2013.pdf

State Pension (Contributory) 3,983m 2013 (3,803m 2012) [Cost up 180m in 2013]
Widow’s & Widower’s (Contributory) Pension 1,350m 2013 (1,343m 2012) [Cost up 7m in 2013]
State Pension (Non-Contributory) 952m 2013 (963m 2012) [Cost down 11m in 2013]
Invalidity Pension 708m 2013 (604m 2012) [Cost up 104m in 2013]
State Pension (Transition) 137m 2013 (147m 2012) [Cost down 10m in 2013. This scheme is being phased out]
Bereavement Grant 20m 2013 (20m 2012) [No change]
Widows’/Widowers’/Surviving Civil Partner’s (Non-Contributory) Pension 17m 2013 (18m 2012) [Cost down 1m in 2013]
Blind Pension 15m 2013 (16m 2012) [Cost down 1m in 2013]
Death Benefit 8m 2013 (8m 2012) [No change]

Total 7,190m 2013 (6,922 2012) [Cost up 268m in 2013]

% of Total DSP an SIF spend (excluding Admin)
7,190/19,997 = 36% (2013)
6,922/20,459 = 34% (2012)