Means Test Old Age (Contrib.) Pension?

Sydney2007

I think shortly the Contrib. Old Age Pension will have to be means tested in some way. I know that the recipients have spent years making their contributions, but the country simply can't afford a universal pension. There will be a figure below which the Pension can't be reduced without leaving those who rely solely on it in dire poverty.And there may (will?) come a stage when the country can't afford that minimum pension for everyone. On the other hand, cuts to the pension do not affect as severely persons who already have a private pension or additional private income from property, shares etc.

I dont think this government will do it, but the next government may, and would simply brazen out the national uproar which would erupt - they would have four or five years before the next election, and we would be used to the system by then.Some government is just going to have to say "sorry, the money isn't there, too bad" to the people who have made their PRSI contributions all their working lives, and who have still managed to put aside something to support them in their old age.

Obviously, the government will start with the seriously wealthy pensioners, but once the principle is established, the means test bar can be gradually lowered - eg. start with people who have €80,000+ annual income for example, and go from there.

Does anyone think this might happen, and do they think it might be an acceptable idea?

Sardonicat

Hmmmm.

Just a few points.
1) It's not universal. Only those with the relevant contributions are eligible. Those without have the non-contrib pension, and this is already means tested. The only truly universal payment we have atm is child benefit.

I think once you start messing around with the contingencies for eligibility for a prsi based benefit by introducing a means test you are undermining the whole principle behind the prsi system. The knock on effect of that could spell all kinds of trouble down the line.

It's possible that the number of contributions made in order to qaulify will have to increase considerably, and conditions for eligibility will have to be tightened up(e.g., the number of continous contributions over a set number of years) but this will not start to have an impact for at least a few years.

The fairest (and safest, in the long term) thing is to make a small reduction across the board, imo. But I will probably be shot for suggesting that.

Coillte_Bhoy

Sydney2007 wrote: »

I dont think this government will do it, but the next government may, and would simply brazen out the national uproar which would erupt - they would have four or five years before the next election,

Eh? We will have lost our economic sovereignty by next summer at the latest so who is in govt is irrelevant.

SkepticOne

Coillte_Bhoy wrote: »

Eh? We will have lost our economic sovereignty by next summer at the latest so who is in govt is irrelevant.

There will still be latitude for whatever government is in power to determine how cuts will be made and in what areas even though the broad parameters will be provided by the fund itself.