Charlie Weston: Change of retirement age to 68 is 'like stealing'
09 March 2010
Irish Independent
Will you still need me, will you still feed me, When I'm sixty-four? MANY 40 year olds are probably too old to remember the lyrics, above, to the Beatles song 'When I'm Sixty-Four', but it came to mind in the past week when this newspaper revealed that the state pension age is to gradually rise to 68.
The State has decided that it will not feed us or need us until we reach 68, certainly in terms of paying us a pension.
Union official Fergus Whelan told the 'Today With Pat Kenny Show' on RTE radio this was akin to stealing three years' worth of pensions from people who have already paid for their state pension.
It is hard to find fault with that argument, even if you agree that the demographic situation means the State is facing a huge burden in terms of the numbers who will be over 65 in the years ahead.
The changes proposed by the Government mean that anyone under the age of 49 will have to keep working until they are 68.
Many people will be out of their job at 65, because that is the retirement age in their contract of employment, but not qualifying for a state pension for another three years.
The Department of Social and Family Affairs admits some people may fall through the cracks -- retired but not entitled to a state pension.
These people will end up having to apply for the likes of Jobseeker's Benefit or Jobseeker's Allowance, the department says.
The prospect of someone who has worked for 40 years and paid PRSI (Pay Related Social Insurance) all their working life having to claim the dole does not seem fair.
Also hard to swallow for middle earners is the planned cut in the tax relief for pension saving.
Relief
This is to fall from 41pc to 33pc. The fact that you can claim relief on PRSI and the health levy means the effective cost of €100 of a pension pot will rise from €51 to €59 for those on the higher rate of tax.
Director of taxation with Chartered Accountants Ireland Brian Keegan feels it is equitable to have lower- and higher-rate taxpayers getting the same level of tax relief.
One suspects that most middle earners could accept this if there had been some moves against the aggressive tax planning by "fat cats" included in the Government's pensions framework.
Proprietary company directors can still accumulate a tax-free pension fund of €5.4m, which hardly seems fair.
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