State Pension avoids direct cut in Budget 2011

Older & Bolder welcomed the fact that the State Pension and associated supports (household benefits package and free travel) have escaped a cut in the Budget.

However, Older & Bolder expressed concern about cuts to other vulnerable groups in this Budget. Older & Bolder has long advocated the protection of all vulnerable groups and the shaping of a more equal society where there’s trust, solidarity and where we shape systems of care and support that pool costs and risks across the generations.  Older people will be concerned about their family members who will be devastated by proposed 4% cuts to Social Welfare and cuts to Carer’s Allowance (under 66), Blind Persons Pension, Disability Allowance, Supplementary Welfare Allowances and Invalidity Pension.

Older & Bolder welcomes the fact that the State Pension escaped a cut in this Budget, this is a tribute to over 40,000 people who have signed Older & Bolder’s petition to defend the State Pension over the course of a two month campaign by the alliance. We are relieved because we know that 88% of older people are reliant on social transfers (i.e. State Pension, Fuel Allowance,  Household Benefits Package)  to protect them against the risk of poverty.

The once-off allocation of €40 to households in receipt of fuel allowance will be useful in offsetting the challenges of the current extreme weather conditions we are experiencing. However, this falls well short of the Government’s promise to introduce a voucher-scheme to compensate people on low incomes for the rise in fuel costs prompted by the introduction of the carbon tax earlier this year. The Government have now ruled out introducing any compensatory scheme ensuring additional costs for those already stretched to breaking point.

While older people will be relieved that their basic supports will remain intact they will be affected by the phased abolition of modest age-related income tax exemptions and credits. For example, age exemption limits will be reduced by €2000 from 1st January for a single person and by €4,000 for a married older couple. Age credits and exemptions for people aged over 65 will be abolished completely over the next four years. This will worry older people on low, fixed incomes who are currently trying to bridge deficits in health, social care and transport services from their own limited resources.

The Health Levy and Income Levy are being abolished and replaced by a new Universal Social Charge. Those whose sole income is from a Social Protection payment, e.g. the State Pension, will be exempt from paying the new Universal Social Charge. However, people with even the most modest income in addition to the State Pension will have to pay this regressive charge.

Furthermore, there will be a €746 million reduction in health spending next year alone. Any reductions in frontline Health and Social Care services will pose huge challenges for older people who find themselves struggling to address those needs from reduced personal resources.

On top of this the Minister for Health, Mary Harney, has flagged the introduction of Fair Deal style co-payments for Home Care Packages. Older & Bolder will closely monitor any developments in this area.

Older & Bolder will continue to analyse the Budget proposals to gauge the exact implications for older people.