Minister backs remortgaging to boost pensions

Minister for Social and Family Affairs Séamus Brennan has proposed that older people should be able to remortgage their property to the State in return for an annual income which would supplement their pension.

The Minister also announced yesterday he was examining plans which would allow 85,000 people who receive non-contributory pensions to continue to work if they so wished.

Speaking at the launch of a position document drawn up by the National Council on Ageing and Older People, Mr Brennan said he was looking at fresh ideas and fresh thinking on opportunities and rewards for older people.

Mr Brennan said he wanted to examine mortgage options that would allow older people, particularly those on low incomes and who owned their own homes, to have access to a modest annual stream of income.

Under the plan older people could mortgage a portion of their home or property to the State. They could continue to live in their home and receive an annual sum which would top-up their pension.

"I have spoken to my Canadian counterpart about their ideas for a scheme that allows homeowners to top up incomes by mortgaging a part of their property. The amount is recouped by the State or agency acting for the State when the home is eventually sold.

"This so-called reverse mortgage would allow low-income seniors to raise their annual incomes consistently over time and offer them a greater sense of security. In Ireland over 80 per cent of older adults living alone own their own home," Mr Brennan said.

The Minister also said he was examining the distinction that currently existed between contributory and non-contributory pensions as part of overall reform in the pension area.

"A pensioner on a contributory pension is entitled to unlimited income without having the value of the pension affected. On the other hand, someone on a non-contributory pension who earns anything over about €7 per week has their pension reduced.

"I see no reason why those on non-contributory pensions who are fit and willing and eager to work should not be allowed have that opportunity while retaining the full value of their pension," he said.

Mr Brennan also revealed that he was considering the extension of the free travel scheme for older people. "I am now actively pursing the introduction for all senior citizens of an all-island free travel scheme. This would allow citizens north and south free travel anywhere on the island.

"I am also holding discussions on the logistics of allowing Irish senior citizens in Britain to have access to free travel when they return on visits to Ireland," Mr Brennan stated.

The Minister said he had also suggested to the National Pensions Board that it should examine the option of offering everyone who reached age 66 the option of remaining at work.

Mr Brennan said his message to the generation of upwardly-mobile people who were convinced that they were responsible for the Celtic Tiger was that they were not.

"They are standing on the shoulders of the people who through hard work, sacrifice and vision laid the foundations for the success," he said.

The director of the National Council on Ageing and Older People, Bob Carroll, appealed for the development of an age-friendly society in Ireland.

The council's document maintained that there were a number of attitudinal barriers to such a development including endemic ageism and an equation of age with dependency.

The council urged that the concerns of older people be included as a priority in future partnership agreements.