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Government must drop plans for USC hike for older people – Age Action

Published 16/05/2014

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Age Action has warned the Government that its plans to increase the rate of Universal Social Charge (USC) for pensioners and medical card holders from 4% to 7% from  January would cause untold hardship among a section of society which is already struggling to make ends meet.

“During our consultations with older people across Ireland in recent months we heard time and again from older people who are being forced to choose between food, fuel and medications,” Age Action spokesperson Eamon Timmins said. “This unacceptable situation is a result of increasing demands on their fixed pensions from new taxes and charges.  Another hike in the USC would push some older people over the edge.”

The older people’s charity noted that the reduced rate of 4% for people aged over-70 and medical card holders under-70 was introduced in 2011 and was due to expire at the start of 2015, as reported in today’s Irish Independent.  But it urged the Government to reverse this decision and maintain the reduced rate.

“Given the hardship which older people on low incomes are facing, it would be ludicrous to scrap the reduced rate, knowing the suffering it would cause,” Mr Timmins said. “This government was elected on the promise that it would protect the vulnerable.  If it is serious about honouring this promise, it cannot introduce yet another tax hike, and take more money out of the pockets of low income pensioners.”

Age Action has called on the Government to make a definitive statement, before the European and local elections, that the 4% reduced rate, and those eligible for it, will remain unchanged and that plans to increase it to 7% will be dropped.

Age Action’s consultations with older people across Ireland highlighted the huge financial pressure that many were facing.  From their fixed pensions (and falling pensions in the case of some older people), they are paying a long list of new taxes and charges including property tax, hiked prescription charges, soaring fuel bills (with cuts to their fuel supports), rising telephone charges (following the abolition of the phone allowance last year), and rising medical costs (for older people in poor health who are losing their medical cards on income grounds).

 

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Age Action welcomes enhanced fuel allowance for those aged 66+, but regrets state pension lost spending power and lack of supports for those living alone.

Reacting to Budget 2025, which fell on the International Day of Older Persons, Age Action’s policy adviser Nat O’Connor said “An additional €12 for those in receipt of a full state pension will help some older people to cover their weekly costs, but it means that for yet another budget cycle the state has failed to restore the state pension to the value it had in 2020. We would need to see it increased by a further €18 for it to cover as much as it did four years ago, when many people already struggled to meet their needs. Older people now have weaker income security because the government failed to deliver on its promise of benchmarking and indexing the state pension, which every other Western European country already does. Age Action renews its call for benchmarking and indexation, to protect our peace of mind in retirement.”  

He continued, “Age Action has strongly advocated for reform to the fuel allowance given that older people are at particular risk of energy poverty, due to disproportionally occupying Ireland’s most poorly insulated homes, and our bodies retaining less heat as we age. Age Action welcomes the government’s recognition of this reality through granting people aged 66+ access to the fuel allowance under a generous means test, which will go a long way to combatting energy poverty in older age.” 

He continued, “Age Action deeply regrets the government’s failure to adequately address the disadvantages experienced by older people living alone. This is a repeat of last year’s budget, when we raised concern that the state did not recognize them as a particular cohort of our society in need of targeted support. The living alone allowance has now been allowed to stagnate since 2022, when it was only raised by €3, and the fuel allowance for those aged 66+ allows people living alone barely over half the income of a couple, despite the most recent research showing they bear 79% of the same costs. The carer’s allowance means test allows older people living alone only half the income of those living with another. This demonstrates a pattern of disadvantage for older people living alone, who were hit hard by the cost-of-living crisis, being twice as likely to experience material deprivation in 2023 as they were in 2020, before inflation began to spike. They are also nearly three times as likely to experience material deprivation than couples aged 65+. Six in ten older people living alone are women, so failing to support older people living alone also means compounding gender inequality in older age, where there already exists a 35% gender pension gap.” 

“Age Action welcomes the introduction of a universal companion pass, which will come in in September 2025. We have long emphasised the transport inadequacy experienced by many older people in Ireland and how this contributes to social isolation and exclusion. The universal companion pass is a simple improvement that will be greatly appreciated by many older people, in particular those who find travelling alone difficult or impossible.” Dr O’Connor concluded.  

 

 

NOTES TO EDITORS 

Age Action is the leading advocacy organisation on ageing and older people in Ireland. Age Action advocates for a society that enables all older people to participate and to live full, independent lives, based on the realisation of rights and equality, recognising the diversity of experience and situation. Our mission is to achieve fundamental change in the lives of all older people by eliminating age discrimination, promoting positive ageing, and securing the right for all of us to comprehensive and high-quality services. 

 

Contact person for reactions, interviews, etc.: Carrie Benn, Head of Communications, 087 9957838 

 

The main points of Age Action’s Budget 2025 submissions are as follows: 

SECTION 1: SOCIAL PROTECTION 

  1. Benchmark and index the state pension so that its rate will always be at least equal to 34% of total average earnings, to be achieved by 2026. Increase the rate of the state pension by at least €20 in Budget 2025. 

  1. Introduce an Energy Guarantee for Older Persons payment to better target cash supports to lower income households and to those in poorly insulated homes, while also insulating them from spikes in inflation.  

  1. Target more support to older people living alone. 

  1. Index all social protection means tests and income thresholds to earnings and inflation, to stop eligibility for supports being effectively reduced by inflation. 

  1. Address anomalies and inequalities in the state pension entitlement of carers, which currently mean that long-term carers of up to 19 years may not receive any credit towards a contributory state pension if they do not also have 10 years of paid contributions.  

  1. Conduct a gender and equality review of the Total Contributions Approach (TCA) to calculating the rate of the state pension, and suspend use of TCA until this is concluded. 

  1. End stereotypical household assumptions in welfare eligibility criteria, which currently preclude some older persons from accessing income supports due to a household composition other than living alone or living as a couple. 

  1. Halt the option of a deferred state pension to 70 until multiple anomalies and inequities that are caused by the current scheme rules have been addressed. 

  1. Implement other social protection proposals, as outlined in Section 9. 

 

SECTION 2: REST OF GOVERNMENT 

  1. [PER] Appoint a Commissioner for Ageing and Older Persons, with a supporting legal framework and an independent budget, to ensure we are all treated fairly and with dignity as we age. [€2.5 million] 

  1. [ETE] Abolish the prevalent ageist practice of mandatory retirement, so that we all have the option to remain in or re-enter employment beyond age 65, as a step towards eliminating legally permitted age discrimination. [revenue raising, no estimate available] 

  1. [Finance/PER] Develop a comprehensive, all-of-government national ageing strategy, with a requirement for implementation plans in every relevant state agency, to eradicate ageism and to ensure that we prepare sufficiently for the demographic transition. [<€1 million] 

  1. [Health] Deliver on the pledge of a strong, fully universal and accessible healthcare system that is tax-funded and free-of-charge at the point of use. [€567 million] 

  1. [Finance/PER, and FHERIS re digital skills] Prohibit ‘digital only’ services, fund digital skills training and adequately resource traditional alternatives such as desk and telephone services, as a step towards implementing a rights-based approach to accessing publicly funded services. [€10 million] 

  1. [Health/CEDIY] Introduce a care strategy using a human rights-based approach to improve, expand, and harmonize our care options. [<€1 million] 

  1. [HLGH/Transport] Implement policies to ensure that all of us can age in place in our homes and communities, in particular, supports and protections for older persons renting, and the enforcement of universal design principles for all new builds. [€45 million] 

  1. [Foreign Affairs] Support the introduction of a UN Convention on the Rights of Older Persons to address the gaps in the existing human rights system by clarifying states’ human rights obligations and responsibilities towards older people. [<€1 million] 

  1. [Finance, and Taoiseach re CSO] Adopt the use of an Employment Based Dependency Ratio. [<€1 million] 

  1. [Finance] Increase the tax exemption thresholds for people aged 65+ to €22,320 for an individual and €44,640 for a couple. [revenue neutral] 

  1. [Finance] Reduce the extent to which high earners can avail of pension tax breaks and tax-free lump sums on retirement. [revenue raised: €500 million] 

  1. [Finance/Social Protection] Ensure that all departments update means tests and income thresholds in line with inflation and changes to social protection rates. [revenue neutral] 

  1. [Foreign Affairs] Increase official development aid to 0.7% GNI, including a focus on ageing. [€300 million] 

  1. [DRCD] Increase funding for SSNO and CVP grants by 25%. [€1.8 million] 

 

Age Action’s pre-budget submissions can be found here: https://www.ageaction.ie/how-we-can-help/campaigning-policy/age-action-budget-submissions-government