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Get the FACTS about the State Pension!
What is the current rate of the state pension?
€265.30 for the contributory state pension and €253 for the non-contributory state pension. Only two-thirds of recipients get the full rate.
What would the rate of the state pension be if it was benchmarked to average earnings?
In 2024, it would be €318/week, €53 more than the top rate contributory state pension at present.
Why should the state pension be 34% of average earnings?
First proposed in 1998, this pledge is developed in The Roadmap for Pensions Reform 2018-2023 and The Roadmap for Social Inclusion 2020-2025, and a technical analysis of the benchmark is conducted as part of the Report of the Commission on Pensions. The Minister for Social Protection has pledged to bring an “input” on benchmarking the state pension into Budget 2024, but this is not the legal certainty that is required.
The 34% benchmark would go some way to reducing the high pension inequality faced by women, carers and people with disabilities.
Will 34% of average earnings eliminate poverty among older people?
No, unfortunately not. But it will provide security because people will know that the pension will increase automatically. Benchmarking would take the politics out of the state pension.
Pension income would need to be 40-50% of average earnings to ensure people are not in poverty in older age. People will need to save for retirement to maintain their living standards, including via auto-enrolment and the important role of occupational pension schemes and personal pension savings.
Why earnings not inflation?
Earnings grow more over time, therefore benchmarking the state pension against earnings will provide older people with a fair share of economic prosperity.
But both is better, which the government has acknowledged in the proposal for ‘smoothed benchmarking’, which will link the state pension to average earnings but give a boost to pension incomes when inflation is higher than earnings growth, after which earnings will have to catch up before the pension would go up again.
Why is legal certainty about benchmarking required?
Without legal certainty, the state pension rate would remain a ‘political football’ in the annual budget, which is why it should be automatic—just like the government is proposing for the annual indexation of income tax bands against inflation.
Weren’t the €12 and one-off payments enough?
No, while welcome, the state pension still lost spending power despite the €12 increase. The one-off payments were not enough to bridge the gap, plus not everyone got them and they only last for one year after which the lost spending power is even more of a problem.
Is it affordable to raise the state pension?
Yes. Raising it by €53/week would cost approximately €1.7 billion/year, at a time when tax and PRSI revenue was €35.4 billion higher in 2023 compared to 2020, which is an increase of over 52%. While revenue linked to multinational corporations may be unsustainable, the state still has strong public finances that can afford to lift older people out of poverty.
In 2021, Irish public spending on old age social protection was 3.5% of GDP or 6.4% of modified GNI, making Ireland the second lowest spender on old age social protection in the EU. The average across the EU was 10.8% of GDP.
Isn’t the Irish state pension rate one of the highest in Europe?
It is sometimes said that the rate of the Irish state pension is higher than in most other EU countries, but this is a deceptive claim.
In Ireland, there is only one tier of state pension providing a basic rate for all, with not everyone getting the full rate. In every other EU country, there is a second tier, top-up state pension based on previous earnings or contributions in addition to the basic rate.
In 2021, in Ireland, pensions from all sources received by people aged 65-74 replace 39% of the earnings from work of people aged 50-59. The EU average was 58% and the highest rates were 81% in Luxembourg and 79% in Spain. Because of the lack of a second tier, Ireland’s pension system had the third lowest income replacement rate in the EU.
Aren’t poverty levels among older people low?
No level of poverty is acceptable, especially for an older person who has no capacity to earn more money to change their circumstances.
The Survey of Income and Living Conditions (SILC) 2022 showed that one in five people aged 65 or older (19%) was at risk of poverty, up from one in ten (9.8%) in 2020.
One in three (33.6%) older people living alone was at risk of poverty, up from one in five (20.5%) in 2020.
Has keeping the state pension age at 66 made raising the state pension unaffordable?
No. Ireland has one of the youngest populations in Europe, and will still have the sixth youngest population by 2070, according to Eurostat projections. This means that we will have the economic capacity to fund a decent state pension and a pension age of 66.
We do have to increase funding for the state pension due to our ageing population, but most of the extra cost is due to the good news that more people are living longer. The Commission on Pensions found that raising the pension age to 68 would only reduce the cost by 16%, with 84% of the extra cost of the state pension due to growing numbers of older people. The Commission calls for PRSI increases to cover the cost of the state pension.
As shown earlier, Ireland’s spending on old age social protection is among the lowest in the EU, so there is a lot of scope to increase that spending without going beyond typically European levels.
Click here to download a PDF version of the Fact Sheet!
The State Pension is a real Shame!
The Pension Coalition launched the beginning of a series of townhall meetings on Monday 19th June at Liberty Hall in Dublin. The purpose of the townhall meetings is to raise awareness of the inadequacy of the state pension and the need to raise the pension rate to 34% of average earnings. This figure of 34% was first proposed by the Government almost 25 years ago and was once again promised in 2018 in the Roadmap for Pensions Reform 2018-2023.
At the Dublin launch on Monday, representatives from each organisation in the Pension Coalition spoke about the inequalities and impoverished consequences for people relying on the state pension. The Coalition is made up of 5 organisations including the Irish Senior Citizens Parliament, Age Action, Active Retirement Ireland (ARI), SIPTU and the National Women’s Council of Ireland.
Nat O’Connor of Age Action highlighted the gross underfunding in overall social welfare and pension systems in Ireland in comparison to other EU countries. Both Nat and SIPTU researcher Michael Taft dismissed the misconception of the Irish Pension system being a ‘Ticking Timebomb’, advising that there is plenty of funds to support a sufficient and more sustainable pension system.
Our own CEO Sue Shaw and ARI CEO, Maureen Kavanagh demonstrated the lived experience of the people who rely on the state pension and who are struggling every day just to keep the lights on. The two organisations recently conducted membership surveys in which they revealed staggering statistics on the effects of trying to balance the low pension rate against the high cost of living. We even heard from audience members who wanted to let people know just how difficult life has been since the rise in cost of living. Geraldine Murphy spoke about the heartache in having to decide between paying for much-needed vet bills for her dog or fixing a leak in her roof.
No one should have to make these kinds of sacrifices let alone a pensioner who has worked their entire life in order to have the opportunity to enjoy their retirement. This opportunity has been taken away from so many, with people now dreading the day they must retire. We have reached out to people like Geraldine to ask if they would come forward and speak about their experience of living on the state pension. We were truly shocked and saddened to hear that nearly every person was too ashamed and embarrassed of letting anyone know that they were struggling or that their only income came from the state pension. At what point did this sense of shame get attached to the state pension? And how can the Government sit back and let this continue to happen?
The Government needs to keep their promise of a state pension rate of 34% of average earnings to enable people to live at an acceptable standard.
We wish to thank everyone who attended the launch on Monday in Dublin. We would love to continue seeing this support at our next few events. Please see dates below of our upcoming townhall meetings that might be coming to a town near you:
Scam Text Messages in full force!
We have received multiple reports of scam text messages doing the rounds and they can be very convincing. Scam text messages usually come from an unknown number claiming to be someone like Revenue or An Post, for example. The text messages often contain a link and asks you to click on the link which takes you to a website, where you might be asked to provide personal details.
NEVER REPLY to any of these text messages!
NEVER CLICK ON ANY LINK OR WEB ADDRESS contained within these texts!
A newer type of scam text being circulated is from someone claiming to be a relative or friend who is stuck in a bind. Our own staff members have received a text message asking or help from mum, claiming that their phone is broken and that they have gotten a new phone number. In this instance, the scammer asks you to reply to this ‘new number’ either by text or on Whatsapp.
NEVER REPLY to any of these text or Whatsapp messages!
If you are ever in doubt, DO NOT RESPOND!
Here are some screenshots of text messages that some of our members have received:
Pension Promise Campaign 2023
“The Cost of Living is reducing our spending power – I cannot afford to buy a bale of briquettes.”
The Pension Promise Campaign is calling on the Government to honour the promise of a state pension rate of at least 34% of average earnings. The Pension Promise Campaign is led by the pension coalition which consists of the ISCP, SIPTU, Age Action, the National Women’s Council and Active Retirement Ireland. The Pension Promise Campaign is part of a wider demand for fair and flexible pensions for all.
Poverty and deprivation are rising for older adults due to high price inflation, with risk of poverty having doubled and consistent poverty more than tripled since 2020. Older people deserve adequate and secure incomes. It’s no more than they have earned after a lifetime of working, paying taxes and contributing to their communities.
The current maximum weekly rate of the state pension is €265.30, just 28% of average earnings. This falls €53 per week short of the Government’s commitment of 34% (€318 per week) and fails to deliver on the Government’s promise to provide a basic level of pension adequacy.
It is 25 years since the National Pensions Policy Initiative proposed a benchmark of 34% of gross average industrial earnings for the contributory State Pension. Under the Roadmap for Pensions Reform 2018-2023, the Department of Social Protection was asked to develop proposals for a formal benchmark of 34% and to institute a process where future changes in pension rates would be indexed to changes in consumer prices and average wages. The Roadmap for Social Inclusion 2020-2025, which the current programme for government has committed to implement rigorously, states that “this Government has committed to the introduction of a system of benchmarking rates of pension payment both to average wages and to inflation.” Benchmarking is also a recommendation of the Report of the Commission on Pensions.
We will be holding a series of townhall meetings across Ireland to try to address this injustice and to bring this unfair treatment of state pensioners to the fore. This campaign is a fight for all current and future pensioners. This affects us all!
So please show your strength and support by attending one of our townhall meetings near you. If you are reliant on the state pension and would like to speak about your experience, please get in touch with Niamh at development@seniors.ie. We stand for all older persons and wish to accurately represent your lived experience.
Find more information about the current campaign at thepensionpromise.com:
Get the FACTS!
Download the FACT SHEET to help answer of your questions.
See details of our upcoming townhall meetings below:
