Workers will pay more for State pensions

Progress is being made on a new scheme, which would see workers paying more for their State pensions, Tánaiste Joan Burton has said this afternoon.

Under plans to tackle the burgeoning pensions bill, Ms Burton’s Department of Social Protection is looking at a new “supplementary pension scheme”, which would see workers being required to make more provision for their old age.

Ms Burton said in 2010 some 11 per cent of the population was over 65 years of age.

But she said it would rise to 15 per cent by 2020. In addition, she said there were currently 5.3 workers to every pensioner in the State, but if the current trend continued, the ratio would be two workers to one pensioner, by 2060.

Ms Burton said she was concerned that some retired workers had only 50 percent of the provision that they should have, while there were separate but similar issues in relation to the self employed.

Ms Burton said in recent years when “incomes and employment were so tight” people could not make “extra payments” - before she quickly amended this to “extra savings”, pointing out that it was money workers were putting aside for their own retirements.

She said as the economy grew the prospect of introducing a universal pensions scheme modelled on that in place in Australia was “getting easier”.

Ms Burton said introduction of the scheme would be gradual but insisted “we will be in a position to progress this successfully”.

Speaking to TDs and Senators Ms Burton also confirmed free travel allowances are to be retained in full in the forthcoming Budget.

Free Travel “was always going to be retained, but some questions were raised during the summer” she said.

Ms Burton told the Oireachtas Committee on Education and Social Protection the Government would introduce a €100 extra allowance for the elderly, carers and some families with special needs in the forthcoming Budget.

This would be a support towards water charges. She said this measure would benefit some 410,000 families at a cost to the State of €42 million.

The Budget would also see Family Income Supplements rise above the current annual cost of €280 million but she warned all figures for Budget 2015 were not yet available.

“Forty percent of tax returns come in in the last four months of the year” she said adding that while the trends had been good the September returns would be particularly important in indicating if progress was being maintained.”

Ms Burton said the Social Protection budget was €19.6 billion in 2014 and this provided a monthly payment to 1.44million people at the end of June.

“The scale of the numbers involved mean the payments impact on about every person in the State” she said.