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Pensions And Social Welfare Payments Could Be Linked To Inflation

Even if energy prices fall, other areas of the economy will eat into people's pensions and social we...


Pensions And Social Welfare Pa...

News

Pensions And Social Welfare Payments Could Be Linked To Inflation


Even if energy prices fall, other areas of the economy will eat into people's pensions and social welfare payments.

That's according to Age Action, which is welcoming proposals that could see such payments linked to the average industrial wage.

The plans, currently being prepared by the Department of Social Protection, are expected to be part of the overhaul of the current pension system.

The benchmarking of the welfare support to the average industrial wage would mean payments could rise or fall with inflation.

Nat O'Connor is a policy specialist at Age Action Ireland. He said this is something they've been calling for.

"Most countries around Europe, including the UK, would have indexing and benchmarking of the State pension and other welfare.

"For example, this year the UK pension will go up by stgĀ£18.70p - and they do that automatically so that the pension is keeping track with the cost of living and also with average earnings so people are not being left behind in society.

"The last couple of years energy prices are going through the roof, people are finding it very hard to choose between putting food on the table [or] keeping the heating on.

"So we need the pension to keep up with these costs".

He says even if prices drop in one area, they're likely to go up elsewhere.

"Energy prices do fluctuate... but prices generally very rarely go down.

"So what we'll see is even if energy prices go down next year [or] the year after, everything else - the new price of bread or milk or rent or whatever it will be - will settle at the new normal.

"So there's still inflation - so in other words, you still need your income to be going up so you have an adequate income year-on-year.

"We mightn't have the big surge, but we're still going to have an upward path".

And he says a separate energy guarantee could also be set up.

"Age Action has called for an energy guarantee that would... track energy up and down.

"So you could track that on a separate energy payment, which would go up and down, but the core pension certainly needs to be adequate".



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Allowance Cost Of Living Disability Inflation Pension Social Wefare

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