Pension age remains big issue to seal a coalition agreement
Q: How did we get into this pension-age row?
A: In late 2010, the Fianna Fáil-Green Party coalition took a government decision to raise the pension age in line with bailout demands of the EU-IMF. In June 2011, the Fine Gael-Labour coalition pushed through legislation increasing the pension to 66 in 2014; 67 in 2021 and 68 in 2028.
Trade unions, Sinn Féin and small parties briefly objected – but it quickly passed.
Q: What happened then? A: In 2014, there was a row when the so-called “transition pension” spanning the years 65-66 was abolished. People retiring at 65 had to sign on the dole pretending they were available for work, getting less money for a shorter period.
But another ruckus passed quickly enough. In January of this year the row rightly kicked off with the union Siptu leading the “Stop 67” campaign.
Q: Why did the pension age become an issue in Election 2020?
A: The immediacy of the 2021 deadline built a head of steam. Rule anomalies, forcing retirees to sign the dole, this time for two years, with vastly less money remained unresolved.
Some people were being forced into retirement at age 65 without proper income and suffering the indignity of signing on the dole at age 65, for two years, after 40-plus years of work.
Q: What did the electioneering politicians do?
A: Sinn Féin jumped in, promising the full old-age pension at age 65. Fianna Fáil promised to stop 67 next January and hold a review and the Green Party did much the same.
Labour promised to stop the age increase to 67 next January. Fine Gael denounced recklessness, but promised a proper transition payment to bridge the years 65-67.
Let’s recall four of the above parties signed up to this pension age change almost 10 years ago.
Q: What about the so-called ‘pensions time-bomb’?
A: It’s a big issue across the western world. When Germany first introduced pensions in the late 1800s few people lived beyond 65 years of age. Happily, many people now live into their 80s. But it makes funding pensions harder.
In a Dáil debate in June 2011, social protection minister Joan Burton said Ireland’s pensioners would double by 2050. But Ireland’s problems are less immediate than some of our EU neighbours.
Q: Why is it still a big issue in coalition formation talks? A: Coronavirus and the €350 weekly payment has put huge pressure on the welfare budget.
Fine Gael is arguing the country cannot afford to keep the pension age at 66. The Green Party appears ready to pick other battles and leave this one. Fianna Fáil’s welfare spokesman Willie O’Dea is up in arms about it.
Q: What is Willie O’Dea’s argument?
A: The veteran Limerick City TD says both Fianna Fáil and the Green Party renewed their commitment to stopping the age increase to 67 in late April.
By then the full extent of the coronavirus costs to the welfare system were clearly apparent. Mr O’Dea specifically points to an interview by his party leader, Micheál Martin, in the ‘Sunday Independent’ on April 26. Mr Martin said keeping the pension age at 66 and reviewing the issue was already a matter of agreement.
A day later, key Green Party people renewed the commitment to keeping 66 as the pension age. Mr O’Dea argues the costs of keeping the status quo are exaggerated. He further argues potential coalition partners are agreed that the coronavirus will be reflationary – and pensioners will spend, putting their money back into the economy.