Without the social welfare system almost 50 per cent of the Irish population would have been living in poverty in 2014. Adequate social welfare payments are required to prevent an increase in poverty. Between 2010 and early 2016 inflation was 3.44 per cent - implying that a buying power of €188 in 2010 was equivalent to €194.50 by February 2016.
Social Justice Ireland proposes that Budget 2017 should address this unacceptable decrease in the living standards of those on the lowest incomes in society. An increase of €6.50 per week to the basic payment would address the gap and it should be a priority for Government in the year ahead.
Social Justice Ireland proposes that a universal pension be introduced for all those aged 66 and over at the same level as the contributory State Pension to replace the current various state pension payments.
Private pensions attract extremely generous tax subsidies that cost the state over €2.6bn a year. While government has restricted the level of tax relief available over the last five years, the pension system remains extremely inequitable and the tax relief granted operates as a subsidy to Ireland’s poorly performing pensions industry, which has consistently been unable to generate the returns on private pensions that Government assumed.
Both of these proposals can be funded through reform of the tax system. Social Justice Ireland proposes that the pension tax break and all other tax breaks be made available at the standard rate only. This reform would fund both of these proposals, it would have a very positive impact on the lives of those on lowest incomes and it would make the tax system fairer.