The front page headline in the Irish Independent reads:
‘Increase in State pension age to 67 should be delayed by seven years, report to recommend.’
Apparently the Commission on Pensions is recommending that the pension age increase should start to rise to 67 in 2028. Each year subsequently it will rise by three months - 66 and three months in 2028; 66 and six months in 2029 and so on until 2031. Then it will start to increase in phases to 68, but that won’t be complete until 2039.
You can read this proposal in a number of ways but whichever way one reads it (and we will have to await the full report to see the rationale), it is clear that the position of those opposed to pension age increases has been strengthened.
Here is the backstory. The pension age was due to increase from 66 to 67 years back in January as per legislation passed in 2012. In late 2019 the Stop67 coalition was formed, made up of four groups – Active Retirement Ireland, Age Action, National Women’s Council of Ireland and SIPTU – who started campaigning on the issue. Shortly after its formation the general election was called. During the campaign the pension age issue took hold and became the third biggest issue on the doorstep – behind housing and healthcare. All political parties, bar Fine Gael, opposed the pension age increase.
The new Programme for Government committed established a Commission on Pensions to examine the age issue. Meanwhile, the pension age increase was scrapped through legislation. Now the Commission has reported to the Minister for Social Protection, Heather Humphreys. And we have this leak.
There are two reasons why the position of those opposed to pension age increases has been strengthened. First, the Commission’s proposal lets the current Government off the hook but ensures that the pension age will, once again, feature prominently in the next general election. Never mind the phasing in; the issue will (rightly) be presented in stark terms: do you support raising the pension age.
What party, apart from Fine Gael, is going to campaign to increase the pension age? The same number as last time – none.
In short, the Commission took the pension age issue and plopped it right back in the middle of the electoral cycle, repeating what happened prior to the last general election. And given the widespread opposition to raising the pension age, they will have home field advantage in the next general election.
Second, the principal fiscal argument against raising the pension age was that it would actually save very little money. The long-term phasing in of this proposal suggests that the Commission has acknowledged this. If there was an urgent fiscal necessity to raise the pension age, they would have proposed an immediate start to 67 with the pension age rising to 68 within the decade. Apparently, that urgent fiscal necessity doesn’t exist, which vindicates the analysis put forward by opponents to age increase.
There might be an attempt to get the current Government to legislate for the increase in 2028 but what would be the point of that? This government can’t lock in the next one. Indeed, it was this government that ‘unlocked’ the decision made back in 2012. In any event, why would any government backbencher address such a contentious issue seven years before the Commission’s proposed implementation date? Would they really want to go on the doorstep justifying that vote? A lot of people live by the adage, ‘put off to tomorrow what you don’t have to decide today’; politicians included.
The pension age increase has now been returned to the political sphere. In the last general election the opposition stopped the pension age from increasing. In the next general election they will be in a strong position to finally kill off future pension age increases. And the Commission’s seeming acknowledgement that there is no immediate fiscal urgency to raising the pension age only strengthens that prospect.
The ‘pension-age-increase train’ has not been put in reverse. But it certainly has been derailed. The next big task is to ensure that no one puts it back on the tracks.
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