Vol. 508 No. 4
46 Mr. Gilmore asked the Minister for Social, Community and Family Affairs the projected cost of adjusting contributory and non-contributory pensions in line with inflation plus 1 and 2 per cent and with average earning increases for the three years commencing 2000. [18895/99]
The information requested is contained in a table which I am making available to the Deputy. The table shows the full year cost of increasing the personal rates of contributory and non-contributory pensions payable to persons aged over 66 by the various options outlined in the question. The table also details the actual cost of the improvements in the personal rates of such pensions which were introduced in the last two budgets.
The cost of the measures introduced in the last two budgets far exceeds any of the future options outlined or requested in the question. The full year cost of increases in the personal rate of social welfare pensions payable to those over 66 introduced in the 1998 and 1999 budgets was £82 million and £100 million respectively. The maximum personal rate of old age retirement pension which now stands at £89 per week has been increased by 14 per cent since this Government came into office.
The 1999 budget provided for an increase of £6 per week in the personal rate of all pensions payable to those over 66. This increase ranged from 7.2 per cent to 8.3 per cent depending on the pension involved. On the basis of an expected inflation rate of 2 per cent in 1999, these increases represented real increases of between 5.1 per cent and 6.2 per cent and were also well in excess of earnings inflation which is projected to be 5.5 per cent for 1999. The 1999 budget additionally provided for increases in the qualified adult allowances payable to pensioners. Where a qualified adult is aged over 66, the rate was increased by £3 per week. This increase ranged between 5.3 per cent and 7.3 per cent and represented a real increase of between 3.2 per cent and 5.2 per cent. The rate applicable to qualified adults under the age of 66 was also increased by £2 per week or 4.9 per cent.
Achievement of its manifesto commitment to raise the maximum personal rate of contributory pensions to £100 per week by 2000 remains one of the Government's key targets. As I outlined, significant progress in this regard has already been made and I look forward to further securing the position of older people in our community in the years ahead.
Table: Full year cost of increases in the personal rate of social welfare pensions and other payments made to those aged 66 and over (65 in the case of retirement pension).
|
1998 |
1999 |
2000 |
2001 |
2002 |
|
|
Increase |
Full year cost £m |
||||
|
1% above inflation* |
– |
– |
45.8 |
48.0 |
50.3 |
|
2% above inflation |
– |
– |
61.0 |
64.5 |
67.8 |
|
Average earnings inflation† |
– |
– |
67.8 |
64.5 |
67.8 |
|
1998 budget |
82.3 |
– |
n/a |
n/a |
n/a |
|
1999 budget |
n/a |
99.9 |
n/a |
n/a |
n/a |
*Price inflation is projected at 2% per annum over the period in question.
†Projected at 4.5% in 2000 and 4% in 2001 and 2002. Average earnings inflation is therefore equivalent to 2% in excess of prices inflation in 2001 and 2002. (Source: Dept. of Finance.)
Does the Minister agree that the report monitoring poverty trends indicates that in the period to 1997 social welfare payments, including payments to senior citizens, only rose at approximately half the level of the general income of the community? How does the Minister intend to address the concerns expressed by the Irish senior citizens' parliament, which will make a submission to the Minister this year? It will ask specifically that consideration be given to a pension regime which would tie in pensions to average income in the long-term and that, as a first step, the Minister should aim at 34 per cent of average income as the norm for contributory and non-contributory pensions in 2002. Subsequently, the aim should be a rate of perhaps 40 per cent of average income. Does the Minister agree the problem is that people on fixed incomes, particularly senior citizens, are left at a disadvantage in a country such as Ireland where national income is growing at a rate of 10 per cent per annum? Incomes throughout the community are growing at a tremendously fast rate but they are not receiving any of the bonuses associated with the Celtic tiger.
I assure the Deputy that as long as I am the Minister for Social, Community and Family Affairs and the Government is in office we will concentrate as much as possible on old age pensioners. Our record since we came into office just over two years ago shows our commitment in that respect. The senior citizens' parliament may have demands but the representatives of old age pensioners at the budget forum would compliment the way in which the increases of £5 and £6 were given in the last budgets and also the changes made regarding the pre-1956 issue which was a bone of contention. They would also compliment a number of other dramatic changes which have been made, such as the bereavement grant.
The increases in the last two budgets were ahead of the consumer price index by a large degree. They were also ahead of the level of increase in earnings. The Government's commitment to old age pensioners is illustrated by its strategic decision to place a major proportion of the proceeds of the sale of Telecom Éireann into future pensions. This may not win us votes at the next election but this strategic decision was necessary for the betterment of the people in the future.
Does the Minister accept that he is in a position to raise his sights substantially and to considerably increase his demands because of the amount of money which is available to the Exchequer? Everything has changed and we are now in a position to qualitatively and substantively improve the lot of the elderly. From that point of view, the Minister should not be shy about making major demands in the upcoming budget to improve the lot of the elderly and other social welfare recipients.
I assure the Deputy that I am anything but shy regarding the demands I make. I may not shout them from the rooftops because I do my business on budgetary strategy in the usual place. However, I assure the Deputy that I will shout for as much as possible for old age pensioners and others.
It is easy for people to say that the place is awash with money and it would be easy for the Government to splurge the existing funds and give in to all the existing demands. However, we must keep an eye to the future because it may not always be rosy. This is what the Government is doing and why it made a strategic decision. The importance of this decision may not be fully understood by people but a major element of the proceeds of the Telecom Éireann sale will go towards social welfare pensions in the future to ensure—
That is only a tiny percentage of pensions.
This will ensure that the social welfare pensions system is secure for all in the future.
