VAT, inflation will wipe out gains, says old-age pensioner

PENSIONER: For Charlie Hammond the increase in the old-age pension will have the most impact. Mr Hammond (67) who is from Dublin's inner city, will benefit by €10. But he believes the Government has missed an opportunity with this Budget and others to better the lot of the State's senior citizens.

As a trustee of the Irish Senior Citizens' Parliament, he has been involved in research in recent years to highlight the fact that Irish old-age pensions, relative to the average industrial wage, are one of the lowest in Europe.

"This has been a very disappointing budget for old-age pensioners," he said.

"I've heard the Minister saying that under his term in office the pension has gone up by over 50 per cent. But as a percentage of the average industrial wage it is a lot lower now that it was in the late 70s. This is despite a period of bumper prosperity."

This year's increase in the pension will be "wiped out" by other increases. "When you are on a pension you can be guaranteed that you will spend all of your weekly allowance. That means pensioners will be hit by the increase in VAT of 1 per cent. And with inflation due to rise by almost 5 per cent that accounts for the increase in pensions."

Mr McCreevy needed to increase the old-age pension by €20 a week if pensioners were to feel any real gain in their pockets, Mr Hammond said.

And because many older people smoke and drink spirits it will mean the increases on both will put further financial pressure on senior citizens.