State Pensions - to cut or not to cut?

Barnacle

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There has been a lot of talk recently about cutting the Old Age State Pension, whether it is contributory or non-contributory is really of no consequence. Now I have heard all the arguments, which mainly are about protecting those who only get the OAP and on the other hand, why should they leave it as these people have not mortgages, etc. etc.

Well here's my take on it and the real elephant in the room, or should I say the two elephants.

Cutting the OAP would increases the deficit in any DB schemes as these tend to be integrated. Now it’s true, there are very few remaining but the biggest one by far is of course is the post 1995 Civil Service Scheme, so any cut would further increase any deficit attaching to the public purse for this reason. Another baby elephant creeps in here, the Public Sector Pensioners, as any cut to the OAP would not affect them (pre 1995 workers) as they do not receive the OAP.

But now to get to the two big elephants, Tax & PRSI. There are certain credits & exemptions available to those over age 65, the benefits get better the older you get. This is the area that should be tackled before any axe is taken to the State Pension. To highlight these, I have made some brief calculation for the same income for a married couple both the same age. The percentage represents the total Tax take including PRSI & Levies.

Income €20,000 each
Under 65 – 6%
Age 65 – 2.5%
Age 66-69 - 0%
Age 70+ - 0%


Income €30,000 each
Under 65 - 17%
Age 65 - 13.8%
Age 66-69 - 10.7%
Age 70+ - 6.7%


Income €40,000 each
Under 65 - 22%
Age 65 - 19%
Age 66-69 - 16%
Age 70+ -12%


Income €50,000 each
Under 65 - 27.9%
Age 65 - 27.2%
Age 66-69 - 23.7%
Age 70+ - 19.7%


Abolishing the Age Tax Credit and Exemption Limit and re-aligning the PRSI System would have no affect on those just living on the State Pension, any cut to the benefit will. Personally, I don’t see why someone age 65 and over should have a lesser tax liability than those under.
 
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Bridget558

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I have said it once ill say it again, oap, dole, single mothers payment, fis, child benifit should all be brought back to january 2003 rates, to compensate ESB prices should be cut by 25 percent(there is so much Fat in the esb this would be very possible) The tv licence should be cut by 15 percent (again alot of fat in RTE that could be cut to make this possible) vat should be cut to 11.5 and 18.5 percent.
 

seanmacc

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I have said it once ill say it again, oap, dole, single mothers payment, fis, child benifit should all be brought back to january 2003 rates, to compensate ESB prices should be cut by 25 percent(there is so much Fat in the esb this would be very possible) The tv licence should be cut by 15 percent (again alot of fat in RTE that could be cut to make this possible) vat should be cut to 11.5 and 18.5 percent.
Seeing that we are living in the age of the lie of "CO2 causes global warming" can you see Gormley allowing a cut in energy prices seeing that the Green reckon that they only have 5 years t save the planet.

VAT should take a bit of a dive so as to boost sales and economic activity but our minister hasn't the balls to do it.

Cuts in Welfare and pensions shouldn't happen as they take a large amount of money out of the economy. How many dolies do you know that save?
 

maxthedog

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there has been no pro-rata cut too the PS pension.

While the PS worker is now paying a small levy towards the pension.

Retired PS workers are still enjoying their golden retirment. Unworried and untouched by economic reality
 

Barnacle

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Retired PS workers are still enjoying their golden retirement.
Yeah, and any cut to State Pension will not affect them either, but removal of the credit and exemption limit and the PRSI issue will.

Why should a married couple currently working earning €40,000 pay €4,500 in taxes and a married couple aged 67 earning the same pay absolutely nothing.
 

afns1

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there has been no pro-rata cut too the PS pension.

While the PS worker is now paying a small levy towards the pension.

Retired PS workers are still enjoying their golden retirment. Unworried and untouched by economic reality
Yes, good points. I was calling for cuts in PS wages this time last year. But now with the pension levy and the cut in the budget, they've taken two significant cuts in their take-home pay. While PS pensioners have taken neither. Before PS pay should be hit, PS pensioners should take a cut.
 

selkies

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Yeah, and any cut to State Pension will not affect them either, but removal of the credit and exemption limit and the PRSI issue will.

Why should a married couple currently working earning €40,000 pay €4,500 in taxes and a married couple aged 67 earning the same pay absolutely nothing.
Exactly, and why should they have a medical card?

People should get social welfare based on their means, not their age!
 

afns1

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Cutting the OAP would increases the deficit in any DB schemes as these tend to be integrated. Now it’s true, there are very few remaining but the biggest one by far is of course is the post 1995 Civil Service Scheme, so any cut would further increase any deficit attaching to the public purse for this reason.
I'm not sure your point here. Does this just mean that there would be no saving (or cost) for the State for pensioners on any defined benefit schemes the State is responsible for? Hardly seems an argument not to cut the OAP when this would only affect a small percentage of the total recipients of the OAP (which, between the contributory and non-contributory pension, costs €6bn so there seems plenty of scope for money to be saved). It might affect the arithmetic alright i.e. the State might not save as much as it might first believe. Maybe I'm missing something.
 

afns1

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Exactly, and why should they have a medical card?

People should get social welfare based on their means, not their age!
I agree to an extent. Certainly removing the automatic medical card for those with incomes over €36,000 or couples over €72,000 seems reasonable, especially when one seems the thresholds for the rest of the population. But just to point out that medical cards for these thresholds don't kick in until 70.
 

Baron von Biffo

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The easy answer is the one all you bleeding hearts are refusing to deal with - Euthanasia. These greedy old bastards think that just because they worked all their lives and paid PAYE and PRSI and VAT and all the rest that they should have comfort in their old age. Well we have to tell them that that's bullsh1t. They had their day, it's time they were off the stage. We should give them a choice - euthanasia at 70 (65 for PS workers) or get by entirely on their own. No pension, no medical card. Full cost of hospital care.

End this sense of entitlement once and for all say I.

Tina! Tina!
 

Barnacle

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I'm not sure your point here. Does this just mean that there would be no saving (or cost) for the State for pensioners on any defined benefit schemes the State is responsible for? Hardly seems an argument not to cut the OAP when this would only affect a small percentage of the total recipients of the OAP (which, between the contributory and non-contributory pension, costs €6bn so there seems plenty of scope for money to be saved). It might affect the arithmetic alright i.e. the State might not save as much as it might first believe. Maybe I'm missing something.
The pension in the CS scheme would be made up of a lesser state benefit and a higher benefit attaching to salary to make up the half pension. So overall cost same to the state. CS (Post 95) will also have to increase their contributions albeit small to pay for any decrease in OAP (as they are funding for a higher balance) while pre 95 will not. Difference in funding in other DB schemes will also have to be made up.

I am not making any argument for not cutting the OAP, in fact with the state of the economy I think that a cut could be made, but cut the credits and exemptions and place everyone on the same playing field, regardless of age. But do I think that a cut should be made, no.
 
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Barnacle

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Exactly, and why should they have a medical card?

People should get social welfare based on their means, not their age!
I don't entirely agree with you on the Medical Card issue, maybe the limit for the over 70 could be cut, but in general I would keep the Medical Cards.
 

afns1

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The easy answer is the one all you bleeding hearts are refusing to deal with - Euthanasia. These greedy old bastards think that just because they worked all their lives and paid PAYE and PRSI and VAT and all the rest that they should have comfort in their old age. Well we have to tell them that that's bullsh1t. They had their day, it's time they were off the stage. We should give them a choice - euthanasia at 70 (65 for PS workers) or get by entirely on their own. No pension, no medical card. Full cost of hospital care.

End this sense of entitlement once and for all say I.
Your world must be very black and white if that's how you see people suggesting cuts for pension payments given the financial state the country is in.
 

afns1

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Looks like some tax credits, etc may be changed:

Minister hints at budget cuts for pensioners - The Irish Times - Thu, Nov 11, 2010

Strong opposition to cutting the old age pension has been expressed at meetings of the Fianna Fáil parliamentary party while the Green Party has also come out against such a move. However, some of the entitlements enjoyed by people over 65, such as higher income tax thresholds, larger tax credits, exemption from Dirt tax and a range of free State services, are likely to be curtailed.
 

jacko

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Minister hints at budget cuts for pensionersso

so what are the backbenchers going to do now?

“To say that no one over 65 years can afford to make a contribution is patently nonsense,” the Minister told reporters at Leinster House.
-O'Cuiv

for once the Minister speaks some sense
 

Aindriu

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Cue the 'Silver Army' on parade outside Leinster House again. It doesn't pay to p1ss them off as Fianna FAIL will find out to their cost in the elections :D
 

SKELLY

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This is all your typical FF ruse.

They wont cut it, the backbenchers need a "victory" when they go back home before the budget!
"we showed them dubs, eh, up ya bhoya!"


The thing is no one believes this ************************ anymore. The markets have had enough of this rubbish and have called time on ireland.
 

Mister men

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Does anyone even listen to these gob************************es anymore?
 

DCon

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Mattie McGrath (if you can believe anything he says) ,just on Newstalk, reckons "Fat Cat" pensioners should be cut but ordinary pensioners should be protected.
 


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