A cut of a shilling in the pound on pensions? SBP

gijoe

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It seems as if Brian Lenihan wants to be remembered in the same breath as that of Ernest Blythe the Cumann na Gaeldhael Minister of Finance who cut a shilling in the pound (5% for those of you old money illiterates) off pensions in 1924. FG was dogged with this election after election for decades.

According to the SBP the Cabinet considered this as an option at last Thursday's meeting. Seems like electoral suicide to me as virtually all pensioners vote and they will not be turning out for FF if they cut circa €10 from their pensions. Are the government calculating that a 5% across the board cut will result in less anger than bigger cuts in specific programmes such as Child Benefit? I doubt if this will be the case. Although there really is no argument that equity demands that pensions have to take a hit in some fashion - political expediency dictates otherwise when virtually every pensioner votes in what will almost certainly be a general election year in 2011.

Benefits in line of fire as budget talks heat up | The Post
http://www.thepost.ie/newsfeatures/phoney-war-nears-an-end-52304.html
 


johnfás

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Political expediency would dictate that the old aged pension is untouchable.

However, if one has any form of commitment to equality it must not be untouchable. We cannot have a significant proportion of the overall population declared entirely immune to making a contribution to digging us out of this mess that we are in.
 

Watcher2

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Well, FF have more or less admitted that the state pension is simply not enough for people to live on in retirement. They have said time and again and developed policy documents which either directly or indirectly state that the state pension is not enough and why they are trying to get more people to save for retirement. How can they then turn around and discredit their own policies by cutting the benefit in anyway?
 

gijoe

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Something like €4billion is paid out in contributory and non-contributory pensions. To exempt those from cuts means finding €200million from other programmes across the Social Welfare budget on top of a 5% cut. Cutting the 3rd and subsequent child top up from Child Benefit plus some other minor programme cuts would meet this figure. I suspect the government will come up with the €200million in areas like this. Although it is not fair that pensions would be exempted.
 

gijoe

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Well, FF have more or less admitted that the state pension is simply not enough for people to live on in retirement. They have said time and again and developed policy documents which either directly or indirectly state that the state pension is not enough and why they are trying to get more people to save for retirement. How can they then turn around and discredit their own policies by cutting the benefit in anyway?
Didn't they promise €300/week by 2012 in their 2007 election manifesto? Originals of that document will be worth their weight in gold in decades to come and one with Bertie's signature would probably be on display in the National Museum! petunia
 

Watcher2

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Something like €4billion is paid out in contributory and non-contributory pensions. To exempt those from cuts means finding €200million from other programmes across the Social Welfare budget on top of a 5% cut. Cutting the 3rd and subsequent child top up from Child Benefit plus some other minor programme cuts would meet this figure. I suspect the government will come up with the €200million in areas like this. Although it is not fair that pensions would be exempted.
I have 3 children myself and have advocated this for a while. I have no clue how a third or subsequent child should receive more than the first or second. If anything, the third and subsequent are less expensive.

Personally, I dont see why anyone should have to pay for me to have children. I think child benefit should be scrapped in its entirety. If that is politically inappropriate, why not supoplement with a free GP card until the child reaches 16? Or a one off payment when the child is born to help with the expenses of all the ecoutrements (I'm sure thats spelt wrong. Never spelt it before or seen it written down).
 

controller

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Or a one off payment when the child is born to help with the expenses of all the ecoutrements (I'm sure thats spelt wrong. Never spelt it before or seen it written down).
accoutrements ....I think that is how it's spelt. But that a word I have not heard in a long time
 

rockofcashel

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I have 3 children myself and have advocated this for a while. I have no clue how a third or subsequent child should receive more than the first or second. If anything, the third and subsequent are less expensive.

Personally, I dont see why anyone should have to pay for me to have children. I think child benefit should be scrapped in its entirety. If that is politically inappropriate, why not supoplement with a free GP card until the child reaches 16? Or a one off payment when the child is born to help with the expenses of all the ecoutrements (I'm sure thats spelt wrong. Never spelt it before or seen it written down).
Nobody is paying you to have children, but what the state is doing is recognising that there are costs associated with raising children and are offering help to meet those costs.

Those children will be the economic building blocks of the future remember. The pension you will earn (if you are not already doing so), will be paid for from the labour of the children born in the generation after you.

As for the Government considering the pension off limits, I think that would be a disgraceful abdication of political responsibility and final proof that decisions are not being made in the common good, but with one eye on political expediency.

No one wants to see a cut in the State pension. But then nobody wants to see a cut in any benefit that anyone is getting, be it a state benefit, a tax allowance whatever. The reality is that through the incompetence of the Government over the past decade, we are all no faced with have to accept cuts to save this economy. That being the case, no sector should be unfairly insulated on the basis of its level of political engagement.
 

gijoe

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Would a budget with a 5% cut in pensions actually pass? I do not think so. I could see any of the Indo's voting for it plus many opportunistic FF backbenchers would see voting against it as their route to saving their seats, particularly if their constituency 'collegue' was a Minister.
 

Libero

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Political expediency would dictate that the old aged pension is untouchable.

However, if one has any form of commitment to equality it must not be untouchable. We cannot have a significant proportion of the overall population declared entirely immune to making a contribution to digging us out of this mess that we are in.
But isn't Ireland's grey army a great example to the rest of us that in a modern democracy, featuring careerist representatives, you can achieve almost anything you want with bit of organisation, commitment and complete disregard for the rest of society?

As they have their job prospects and welfare entitlements cut to shreds, tens and tens of thousands of young people are receiving a valuable tutorial in what happens when politicians face a trade-off between their interests and the aforementioned grey army.

This is also a rare example of where cuts to education, by themselves, actually serve to educate our youth. But going by the lack of stuff smashed up and set on fire, they don't seem to be paying attention.
 

rockofcashel

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Would a budget with a 5% cut in pensions actually pass? I do not think so. I could see any of the Indo's voting for it plus many opportunistic FF backbenchers would see voting against it as their route to saving their seats, particularly if their constituency 'collegue' was a Minister.
It might not pass, but it has to be put on the agenda if any Government or putative Government are to have any credibility in dealing with the current budget crisis in a fair fashion,.
 

Baron von Biffo

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Political expediency would dictate that the old aged pension is untouchable.

However, if one has any form of commitment to equality it must not be untouchable. We cannot have a significant proportion of the overall population declared entirely immune to making a contribution to digging us out of this mess that we are in.
Yeah but tax exiles are wealthy and well connected so they're never going to have to pay their way.
 

Keith-M

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It might not pass, but it has to be put on the agenda if any Government or putative Government are to have any credibility in dealing with the current budget crisis in a fair fashion,.
Exactly, our pension entitlements are overly generous given the current state of the country.

We need to do the following;
Cut the state pension by 5%.
Raise the age limit for pensions to 66 for men and 70 for women (women live longer).
Remove the tax credits for people putting more than €10k a year or 10% of their salaries into a pension fund.
Remove the "one year's salary" benefit that the public service/ semi-states, get at retirement.
Move the entire public service over to defined contribution pension plans.
 

Oldira1

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All parties (my own included) are guily of cowardice in respect of the pension issue. I know plenty of pensioners and they live very comfortably on their pension. For example very few have mortgages, they get cheap ESB and Telepnone, NO TV license,have no dependants,a medical card,free public transport etc. Who can afford a cut most...someone on jobseekers allowance with children and a mortgage or a pensioner? Yes I know the arguments in favour of pensioners but these are meant to be exceptional times. a 5% cut in pensions would genuinely discommode very few.
However pensioners vote so ALL parties are afraid to alienate them. Particularly silly for SF to defend pensioners as few vote for us and those that do will generally be staunch republicans and would probably vote SF no matter what.
 

afns1

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Exactly, our pension entitlements are overly generous given the current state of the country.

We need to do the following;
Cut the state pension by 5%.
I agree.

Raise the age limit for pensions to 66 for men and 70 for women (women live longer).
For some bizarre reason in the UK, women get it before men (60 vs 65). Governments have made the decision to change it but put it years into the future - it will be interesting to see how long it takes in the end.

Remove the tax credits for people putting more than €10k a year or 10% of their salaries into a pension fund.
Remove the "one year's salary" benefit that the public service/ semi-states, get at retirement.
Move the entire public service over to defined contribution pension plans.
It's 1.5 years salary, tax-free. Public service pension bill up by 65% in five years - The Irish Times - Mon, Oct 25, 2010
 

afns1

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As for the Government considering the pension off limits, I think that would be a disgraceful abdication of political responsibility and final proof that decisions are not being made in the common good, but with one eye on political expediency.
The other "primary" payments were cut in last year's budget (incl. disability payments) but not pensions. As you say, I think that decision was done with an eye on political expediency. If they do it again this year, I think it will be a disgrace.
 


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