Study finds disparity in pension transfers

Irish cash transfers for unemployment and housing rank among the highest in the EU as a proportion of national income – but transfers for the State pension rank among the lowest, new research suggests.

Such findings by Séamus Coffey, an economist at University College Cork, came even as he found that Ireland has a “low-tax” and “low-spend” economy compared with other EU countries.

He noted three caveats: Ireland’s relatively young population, in which number of pensioners were relatively lower; Ireland’s lower social protection spending per person aged 65 and above; and ratios using GDP as a denominator understate Irish public spending.

Total government revenue stood at 34.9 per cent of GDP in 2013, the third lowest of the 28 member states. The EU mean level was 43.2 per cent.

Irish public expenditure also was “close to the bottom”, said Mr Coffey. Expenditure amounted to 40.7 per cent of GDP, sixth lowest in the EU. The EU mean level was 46.7 per cent.

Support variations

While pointing out that overall Irish expenditure on social protection was higher up the EU ranking, Mr Coffey noted variations between supports.

The level of cash transfers for unemployment, at 3.1 per cent of GDP, was second only to Denmark and more than twice the 1.2 per cent mean level.

The level of cash transfers for housing, at 0.9 per cent of GDP, was the same as in France and second only to Britain. The mean level was 0.3 per cent.

By contrast, Mr Coffey said cash transfers on the State pension were “right at the bottom” of the EU table. Such transfers stood at 4.1 per cent of GDP, compared with a mean level of 9.2 per cent.