A lucky generation?
Older people in Ireland have never been healthier. They are living longer, ageing better and – relative to the rest of the population – their incomes have declined by less during the recession. The Central Statistics Office (CSO), in its Survey on Income and Living Conditions in Ireland, found the average income of those aged 65 and over fell by 5 per cent between 2009 and 2011. Incomes of the elderly have fared better than other age groups in the economic downturn, and very much better than them in the boom years before the bust. Overall, between 2004 and 2011, the average income of the elderly increased by 41 per cent: or almost four times more than those (18- 64) in the traditional working age groups.
Much of the boost to incomes of the elderly came from greatly increased social transfers in the high growth years. Generous increases to the State pension were financed out of buoyant tax revenues from what was an unsustainable property boom. Higher social transfers contributed to a sharp decline in numbers in the “at risk of poverty rate”.
In 2004, more than one in four of the elderly were in that category. But by 2011, just one in 10 were so defined. Poverty in old age has been greatly reduced.
The CSO data serve to highlight the very different financial outcomes for those aged over and under 65. The long recession has become a watershed event, in Ireland as elsewhere. Many of the economic certainties that prevailed before 2008 have gone, as the developed world now struggles to reduce a huge debt burden of private and public debt against the background of high unemployment and sluggish economic growth. Full-time jobs, with guaranteed final salary pensions, although still available in the public service, have become in the private sector more the exception than the norm.
In very many ways, as the CSO figures indicate, the elderly have been a lucky generation, one that financially gained more in the boom, and lost less in the recession. Of course, as Age Action, a lobby group, has pointed out, higher tax and other charges since 2011 – local property tax etc – have hit the elderly hard: almost nine out of 10 live in owner-occupied housing.
Nevertheless, for society and for the Government, as it prepares the budget, the survey data raise the question of equity between the generations in the burden- sharing that fiscal austerity does, and has required. Does the imbalance need to be redressed? And if so, how can that best be done?
Government Ministers may well question how the State can afford to offer free travel and a free TV licence to all over 65, regardless of their means, and offer those at 70 – again without a means test – a telephone and electricity or gas allowance.
These are subsidies the better off do not need, which the taxpayer cannot afford.