IMPACT OF PROPERTY TAX ON OLDER PEOPLE [14/12/12}

Members of the Older & Bolder alliance are calling for the fair implementation of the property tax.  The legislation before the Oireachtas today should take account of an individual’s ability to pay. This is a principle that applies to all age groups but we in Older & Bolder are particularly concerned about older people who own their own homes, who are now on low, fixed incomes and who are confronted with a new tax that takes no account of their circumstances. 

Older & Bolder Director, Patricia Conboy said, “We are worried about the implications of tax deferral on the family home for older people. Our expectation is that many of those on the lowest incomes, who are entitled to defer paying the property tax, will try to pay the tax despite the risk of being pushed into poverty. We are talking here about a group of people whose custom is to save and pay who are unlikely to start accumulating debt and deferring payment at the end of their lives. Recent experience in Northern Ireland substantiates this concern. There was scant take-up for a scheme where older people on low incomes were allowed to defer the paying of rates. An overwhelming majority opted to shoulder the financial hit rather than defer a financial responsibility. The scheme has since been abandoned.  The Irish Government should learn from this experience and modify the property tax to take account of the circumstance of people who cannot afford to pay.“

Patricia Conboy continued, “The property tax is problematic in that it fails to acknowledge those in negative equity, those in mortgage arrears nor those whose homes are contaminated by pyrite. Another concern is the very low threshold for deferral which is set at €15,000 for a single person or €25,000 for a couple. An additional annual cost averaging between €300 and €500 per annum will be a heavy burden for those with incomes just over these thresholds. As designed, the new property tax will hurt people on low to middle incomes and we are particularly concerned about older people in this scenario who have no way to increase their earnings to offset this substantial tax.”

Patricia Conboy concluded, “We have crossed a significant threshold in terms eroding the value of the family home to pay for services without any national debate. In addition to levying the property tax on the homes of those who otherwise cannot afford to pay, without any forewarning, the proportion of the value of a person’s home paid under the Fair Deal Nursing Home Support Scheme has escalated from 15% to 22.5%. Furthermore, Minister for Older People, Kathleen Lynch, has recently stated that she is exploring the option of extending the “Fair Deal” system of taking from the value of the family home to pay for services to payment for home and community care. These measures will have the greatest impact on those whose ability to manage and age well at home is diminishing. Political and legislative changes that will have a major effect on people’s life choices should not happen without national discussion.”

Note to the Editor:

• Homeowners will be liable for a new property tax of 0.18% averaging between €300 and €500 per annum. There will be no property tax waivers or exemptions for people on low incomes or with disabilities. No rebates or reductions, no discounts or assistance. Rather, any single person with an income of €15,000 or lower or a couple with €25,000 or lower can defer payment until the house is sold or transferred. Deferral will also incur a 4% annual interest rate. Those with incomes over these thresholds cannot choose to defer payment. This property tax will replace the €100 household charge and will take effect from July 1st 2013
• The cost of nursing home care under the Fair Deal scheme (Nursing Home Support Scheme) will become more expensive. Currently, nursing home residents pay no more than 15% of the value of their assets over three years. But this is to be increased to 22.5%. 
• The rates deferment scheme for owner occupiers of pension age in Northern Ireland was introduced in April 2010 and closure of scheme was announced in February 2012. In the words of the Finance Minister for Northern Ireland, Sammy Wilson, “The low take-up of the scheme demonstrates that the scheme is not as effective in providing a payment choice to pensioners, as had been hoped. Over the last two years only 21 pensioners have deferred payment of their rates liability.” 
• The promotion of an age friendly and age inclusive society in Ireland is a core goal of Older & Bolder, an alliance of NGOs in the age sector.  The member organisations are: Active Retirement Ireland, Age & Opportunity, Alzheimer Society of Ireland, Carers Association, Irish Hospice Foundation, Irish Senior Citizens Parliament, and Third Age/Senior Help Line.