Household Charge v Irish State Pension

Jose1

Let's compare the 100 Euro Household charge to the latest budget proposals in reforming the State Pension!

It's my understanding that contributions paid during an individual's working life span will now determine the precise payment due to that person. I appreciate that this has always been pretty much the case, but the only real difference, in the past, was a fiver or so between a contributory pension when compared to a non contributory one.

These new chances will see the lowest entry at 92 Euro per week rising to 230 Euro per week for an average of 48+ contributions per year. Under the new rules, if a person were to retire at aged 66 and live until 80 years old they would expect, at the higher rate, to receive 167,440 Euro, where as a similar person at the lower rate would receive 66,976 Euro, which is 100,464 Euro less.

It appears to me, that the Government are happy with the impact and subsequent uproar the 100 Euro Household Charge has received, because it has acted as a smoke screen for the above.

Most of us on here will now also have to wait one or even two years longer before we receive the State Pension, as the qualifying age will soon be pushed out to 67, 68 and beyond. My personal situation will mean that I will now receive my State Pension at aged 67, where a few guys I know will receive it a year earlier at 66. In real terms I will lose out one year, which in turn, adds up to a massive 11,960 Euro taken from my pocket.

Strange thing is, I don't hear a whole lot of complaint about it.

Idbatterim

Hi Op, where did you receive this information? Im an in total agreement with the new system by the way! My dad moved here in early 80's from Germany and his weekly pensions is a little over E70 and the only thing he gets in addition to that is healthcare, no endless amount of allowance etc...

Idbatterim

These new chances will see the lowest entry at 92 Euro per week rising to 230 Euro per week for an average of 48+ contributions per year. Under the new rules, if a person were to retire at aged 66 and live until 80 years old they would expect, at the higher rate, to receive 167,440 Euro, where as a similar person at the lower rate would receive 66,976 Euro, which is 100,464 Euro less.

those on the lowest rate will Id imagine have contributed virtually nothing to the state and it wouldnt surprise me if they even received a 1c pension, that it would be more than they have ever contributed!

murphaph

Idbatterim wrote: »

Hi Op, where did you receive this information? Im an in total agreement with the new system by the way! My dad moved here in early 80's from Germany and his weekly pensions is a little over E70 and the only thing he gets in addition to that is healthcare, no endless amount of allowance etc...

Also fully agree with these reforms, if true, have you some links OP? Would love to read about these plans.

I would be a classic example of someone who would benefit inordinately under the current system.

I would (if they didn't make any changes) likely pick up a healthy 200+ a week from Ireland plus my German state pension.

People should receive something that bears a relationship to what they paid in. This should go for unemployment benefits too. It all needs a big shake up.

Idbatterim

People should receive something that bears a relationship to what they paid in. This should go for unemployment benefits too. It all needs a big shake up.

absolutely, it would give a bigger incentive to work and cash in hand jobs would lose some of their appeal. You could have someone who contributed millions v someone who contributed nothing and for all intents and purposes they are on the same pension! welcome to ireland...

Arciphel

Sounds like a great idea.

Idbatterim

if people dont have a sufficient pension, why not sell and leaseback house ( a scheme could be created) or sell and rent? Subsidising peoples inheritance is a bit much as far as im concerned!

murphaph

Idbatterim wrote: »

if people dont have a sufficient pension, why not sell and leaseback house ( a scheme could be created) or sell and rent? Subsidising peoples inheritance is a bit much as far as im concerned!

This is why the state pension is so fiercely protected in Ireland, and not only by those in receipt of it. It effectively ensures that people can pass on their legacy to their kids, regardless of whether or not they can afford to do so.

Farmer Pudsey

There is good and bad in this it still will not change anything johnny leaves school at 15 scrounges around robing and raucking meets mary she has his child gets council/corp house he has dole she has single mother benifit has another couple of kids when they are 67 or it may be 70 at the time johnny and Mary get non contributary pension.

Tom get leaving cert he or his parents pay for him through college has part time job until leaving college after 6 years ( 100 contributions) cannot get a job in Ireland goes abroad for 10 years come's back sets up his own company employs 5 people works hard buys his own house health Insurance puts money in pension fund after 20 years has put kids through college has a health setback and company into liquidation. Cannot work for 5 years has to live off some of his saving's. Gets up and running again go working part time and earns enough to save a little and works until 68 or what ever. pension fund manager mismanages his fund he ends up with a small private pension and is state pension is calculated off 50 years working
6year 100 contrip
15 years no contrib
20 years X 52
9 years X 30
average contribution 28

pension 196

As tom has own buisness his wife Ann worked in it and was abroad as well hers is someting similar. They have savings of 100,000 euro and a house worth 150,000

Who deserves the highest pension Tom and Ann or Johnny and Mary and who has the highest

Jose1

Here is a link to the proposed changes .... http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/older_and_retired_people/state_pension_contributory.html

BTW, I agree that some of those who currently don't (and I suppose, won't) contribute toward the pension fund won't find any real change in benefit, but they may well find they are out of pocket by way of extending the qualifying age, which will of course effect everyone, in the years to come.

A friendly word of warning to those who are currently self employed and whose spouse is not involved in the business nor currently paying a prsi contribution, you are the guys who will suffer most as contributions now determine the scale of benefit, which in some cases could be nil!

Still concerned about the Household Charge?