News
Is it Careless to go Cashless?
The idealistic move towards a cashless society has raised its head once again today as the NCT (National Car Testing Service) has announced that they are going cashless.
In a post on social media, the NCT said:
“We’re saying goodbye to cash! NCTs are going cashless over the coming months for your safety and convenience, this means that payment must be made in advance of attending for your NCT. When introduced, payment can be made online or by postal order.”
Although we can appreciate the progression and major contributions of the digital age, it is imperative that those without digital access do not get left behind. This not only includes older persons, but also some persons with a disability or people on lower incomes. Therefore, once an organisation decides to go cashless, they immediately exclude those mentioned.
We know from research conducted by Age Action in 2022, that almost 300,000 people aged 60 or older were not using the internet. According to the CSO, 45% of persons aged 75 and over, have never used the internet. So, what does it mean for these people, when a company goes cashless?
Financial Exclusion: Going cashless limits access to essential goods and services such as the NCT, a mandatory requirement for all car owners. The decision also assumes that all customers are enrolled in a bank or financial institution and those without a bank account are immediately blocked from being able to pay.
Financial Security and Fraud: With the rise in number of scams online, through texts and phone calls, it is no wonder that anyone could be discouraged from entering personal information such as payment details online or over the phone. This can make one feel vulnerable and less trusting but can also leave someone open to risk of fraud or financial abuse.
Lack of Independence: As mentioned, the feeling of vulnerability extends into one’s ability and knowledge in navigating technological devices such as smart phones or computers. An older person may have to rely on someone else to carry out online payments for example. Having to share very personal financial information can feel like an invasion of privacy and once again, can leave such as person open to financial abuse.
Technological Barriers: Quite simply, not everyone has access to a phone, tablet or a computer for a number of reasons such as cost, quality or location. There are certainly numerous parts of the country that still do not have sufficient internet access which impedes a person’s ability to engage online.
Social Exclusion: Nowadays, digital exclusion can mirror certain aspects of social exclusion. A person may not be able to interact with group activities or outings if they are only advertised online or require digital payments. This completely isolates a person and can prevent them from participating fully in their community.
As you can see, the NCT’s decision to go cashless will have a profound impact on any vehicle owner who does not have digital knowledge or internet access. But what about the postal order?
The offer of payment by postal order again causes problems for the same cohorts of people. This would require accessible, in-person customer service at a bank or post-office that is in within a reasonable distance. Not to mention the fee that goes along with a postal order as well as the cost of petrol or diesel to get you there. The knock-on effect of this decision will surely affect multiple households and we support the call on Government to help in reversing this decision.
Seniors Trade Show 2023
On Tuesday 17th October, we will be heading to Bundoran in lovely Donegal for the Autumn Seniors Trade Show. We had a wonderful time participating in the Dun Laoghaire-Rathdown Age Well Expo back in June and engaged in enjoyable conversation with the DLR locals. As we received such positive feedback whilst bringing awareness to the issues surrounding older persons, we thought we would head to another part of the country to do the same.
The Seniors Trade Show is taking place in The Great Northern Hotel in Bundoran, Co. Donegal. Each year, the event has been run in different locations around Ireland such as Clare, Mayo and Wexford and the show continues to grow in popularity. The Seniors Trade Show promises to celebrate all that is good about ageing and will focus on areas such as Health, Activity, Financial Security, Travel, Holidays, Lifelong Learning, Social Connections, Sports, Cooking, Fashion, Investments, and Legal Advice. Most importantly, entry is FREE! For more information about the event itself, you can visit www.seniorstradeshow.ie.
WHEN: TUESDAY 17th OCTOBER
WHERE: The Great Northern Hotel, Bundoran, Co. Donegal.
We will be discussing our latest projects and the nature of the work that we do, to support and advocate for our members. We will have some free newsletters and other bits to give away and look forward to speaking to new people about ways in which we can support older persons in Ireland. If you would like to help us out on the day and discuss the work of the ISCP, please contact Niamh at development@seniors.ie
If you would like to attend,
you can register for your free ticket HERE.
***COMPETITION TIME***
If you wish to attend the event with your group, Seniorscard.ie who sponsor the show are holding a competition on Facebook for a FREE BUS TRIP for up to 50 people. Check out their post on Facebook below and be sure to like and share the post for your chance to win.
What does a smoothed earnings approach mean for the State Pension?
On the back of our successful Pension Promise Campaign, Deputy Seán Canney asked the Minister for Social Protection when the State pension will be increased to 34% of average earnings to meet the Government’s commitment on pensions; and if she will make a statement on the matter. Minister Humphries answered that a smoothed earnings method to calculating a benchmarked/indexed rate of State Pension payments will be introduced as an input to the annual budget process and will be submitted to Government in September each year, commencing this year. (Source: https://www.oireachtas.ie/en/debates/question/2023-06-27/405/#pq_405)
Minister Humphries also mentioned this approach at the Department of Social Protection pre-budget forum at Farmleigh House on 19th July when asked about linking the State Pension to 34% of Average Earnings. The Report of the Commission on Pensions recommends the Smoothed Earnings Approach. This concept is also discussed on Page 41 in the Roadmap for Social Inclusion where it is described as a smoothed earnings system, whereby the rate of pension payment will be linked in the first instance to average wages but, in years where the increase in average wages is less than the rate of increases in prices, it will be linked to the rate of inflation.
While we see this as more secure approach to determining state pension rates, our concern with this response is with the Government’s understanding and definition of average earnings. In the Report of the Commission on Pensions, average earnings exclude over-time, bonus payments etc. It references published CSO earnings statistics – calculating 34% of average earnings (excluding irregular earnings and overtime) and referencing the Harmonised Indices of Consumer Prices (HICP) to calculate a price adjusted rate.
According to Page 26 of the Pensions Commissions’ Working Paper on Benchmarking and Indexation, the use of a base earnings benchmark excluding irregular earnings and overtime is believed to be appropriate for the calculation of a base pension payment. If irregular earnings and overtime were to be included in the benchmark for calculation, then benefits provided to pensioners (e.g., Household Benefits, Fuel Allowance, Christmas Bonus, Free Travel, etc.) would have to be included in the pension payment calculation.
While we understand this rationale, this would not favour a large proportion of pensioners who do not receive any of these types of supplementary supports.
What would be the ramifications if irregular earnings and overtime isn’t included in the average earnings calculations?
By excluding these, the average earnings data would underestimate and under represent the actual income levels of individuals in Ireland. It may fail to capture the full extent of wage gaps and inequities that exist within the population as irregular earnings often vary across different occupations, industries, and demographic groups. This would also limit insights into economic trends and performance as irregular earnings can fluctuate based on economic conditions. To ensure a more comprehensive and accurate assessment of income levels, income inequality, compensation structures, and economic trends, it is important to include irregular earnings and bonuses in average earnings data.
What would be the ramifications for the pensioner?
As the pension rate would be benchmarked to 34% of Average Earnings, the exclusion of irregular earnings and overtime will see a significant drop in the pension rate. Using the latest data from the EHECS (Earnings Hours and Employment Costs Survey) as an example, the difference between the inclusion and exclusion of irregular earnings would be as follows:
Example 1: Including irregular earnings and overtime
€902.56 is the calculated Average Weekly Earnings from Quarter 4 of 2022. This would result in a weekly pension rate of €306.87
Example 2: Excluding irregular earnings and overtime
€812.90 is the calculated Average Weekly Earnings from Quarter 4 of 2022. This would result in a weekly pension rate of €276.39
This results in a difference of €30 per week, €120 per month and €1440 per year which is a considerable amount for anyone to lose out on, particularly for those with no other source of income.
We ask Government and Minister Humphries to review this method in order to best serve all pensioners by including irregular earnings and overtime in their average earning calculations, ensuring pensioners will end up with more money to help counteract the acknowledged cost-of-living increases.
Minimum Essential Standard of Surviving
“Due to the cost-of-living crisis, anything less than a €27.50 adjustment in core social welfare rates will be a real term cut. This is the absolute minimum required to prevent individuals and families being pulled deeper into poverty.”
-Vincentian MESL Research Centre Pre-Budget 2024 Submission
The Minimum Essential Standard of Living (MESL) research was transferred from the Vincentian Partnership for Social Justice, to the Vincentian MESL Research Centre at the SVP in July 2022. The MESL research has been ongoing since 2004. The MESL budget standards research has developed to provide an evidence-based benchmark of what is required for a life with dignity for 90% of households in Ireland, and has become an integral part of the policy discourse around income adequacy, poverty and social inclusion.
The MESL expenditure needs dataset is adjusted annually for all household types, to reflect changes in prices. The income calculations used in the Minimum Income Standard (MIS) analysis and the MISc.ie calculator web application are updated each year, incorporating all relevant changes to social welfare and taxation.
The most recent MESL Annual Update Report 2023 has revealed that the cost of the MESL ‘Basket’ has increased by an average of 10.6% nationally predominately driven by the rising cost of food and energy. The MESL basket identifies minimum goods and services that everyone should be able to afford. However, the core MESL basket also assumes that the household is in good health, does not have a disability and also excludes housing, childcare and secondary benefits.
Although the parameters of the MESL Calculations have been reviewed and updated due to the recent hike in the cost of living, they are still based on multiple assumptions which do not accurately reflect the reality for thousands of older persons in Ireland:
- It is assumed that the older person is receiving the highest pension rate of €254 (non-contributory) or €265.30 (contributory)
- The budget allocated to mortgage or rent payments only ranges from €36.60 to €56.70 per week
- The report assumes that the older person is also in receipt of the majority of all bonuses and allowances
- Older persons are also considered to be a full medical card holder
You can view the figures on the MESL 2023 Appendix Tables HERE.
Even with the above assumptions, the MESL research found that the cost of a Minimum Essential Standard of Living for an older single adult living alone has increased significantly since 2022. One-off income supports or additional weekly allowances have not kept pace with the rise in inflation, which demonstrates income inadequacy in 2023.
As we have mentioned in previous articles, the Survey on Income and Living Conditions (SILC) 2022 revealed that persons aged 65 and older had the highest increase in the ‘at risk of poverty’ rate going from 11.9% in 2021 to 19.0% in 2022. As we hear from more and more older persons who are struggling, we imagine that the number of people at risk of poverty has dramatically increased since 2022 and indeed the number of older persons who have since crossed this poverty line.
“The 2023 analysis finds that, for the first time since 2017, neither the Contributory nor Non-Contributory State Pension will provide the basis of an adequate income for an urban older person living alone.”
– Vincentian MESL 2023 Impact Briefing
The Pension Promise Coalition (ISCP, SIPTU, NWCI, Age Action, ARI) have just completed one round of public meetings as part of a campaign where we have been calling on the Government to deliver on its previous commitment to benchmark the state pension at 34% of average earnings. If this system was introduced by next year, the increase would equate to approximately €53 extra per week. The Pension Promise Coalition, Alone Ireland, the European Anti-Poverty Network (EAPN) and multiple other age organisations are calling for the benchmarking of social welfare payments against a level that is adequate to lift people above the poverty line and provide them with at least a minimum standard of living.
Everyone deserves an equal standing in society, an equal opportunity to participate in their community and equal access to an average standard of living. The ISCP continues to try to address this injustice and to ensure that every older person will have security in retirement.