Governernment policy on pension qualifying age "wholly unacceptable" - Patricia King

20 Jan 2020

Pension Provision

Congress General Secretary Patricia King said “the planned increases to the State Pension qualifying age to 67 years from next January and to 68 years in 2028 is a key election issue that Congress has been campaigning on for many years and she described the government policy on the matter as “wholly unacceptable”.

Patricia King said “the pension issue was raised by ICTU as a matter of grave concern as far back as 2011 when the change was first proposed and consistently thereafter with various government Ministers and the Taoiseach.

The raising of the pension age has also been included in successive Congress pre-Budget submissions.

However, instead of heeding our warnings to pause an increase in the pension qualifying age the Government proceeded with strategies which can only serve to deplete the social insurance fund.

Patricia King said, “a direct employee combined with their employer must pay at a PRSI contribution rate of up to 14.95%, and it was completely imprudent of Minister Regina Doherty to extend 93% of all social insurance benefits to 350,000 self-employed people for a contribution rate of 4%, which covers only 24% of the benefit-cost to the state”. It is predicted that this measure will cost the state €413 million by 2025.

Ms King said Minister Doherty also chose to ignore the advice of the Government’s tax strategy group, which recommended that self-employed people should pay a proportionate contribution of up to 12% towards their pension and other social welfare benefits.

Congress has also strongly advocated the government in relation to the issue of “bogus self- employment”, (the practise of some employers misclassifying their workers as self-employed), that has deprived the State’s social insurance fund of up to €165 million over 2016-2018. Remedial measures to resolve this issue proposed by Government to date are entirely inadequate in our view, said Patricia King.

Separately, it has cost the State over €723 million last year subsidising low paying employers, which could be rectified if the Government agreed to strengthen laws on current collective bargaining provisions.