Cut private pension tax relief, urges support group

TAX relief on private pensions should be cut in the budget in preference to reducing the state pension, campaigners for older people said.

The Older and Bolder Alliance of voluntary groups said part of the €4.3 billion annual cost of the state pension could be funded by clawing back some of the tax reliefs on private pensions. Alliance director Patricia Conboy warned that 85% of older people would be in poverty without the state pension and other welfare supports, and to cut the pension risked tipping tens of thousands over the line.

“Tax reliefs on private pensions cost €3bn and give the greatest level of support to those with the highest levels of income. In terms of both equity and efficiency, the focus in the budget should be on reform of tax reliefs rather than cuts to the state pension.”

The alliance yesterday published research which revisited older people interviewed a year ago for their Feeling the Pinch report to see how their personal circumstances had changed. Ms Conboy said research found people were now stretched to the limit in struggling to maintain their health and independence.

“There is a clear dread of cutbacks in public spending, anxiety about service deficits and a sense of bewilderment in the face of the crisis and anger at those who let this crisis happen,” she said.

One of the chief findings was people on very tight budgets were paying for private health insurance they could ill afford as they could not rely on the public health system to meet their needs.

One of those revisited, ‘Peter’, aged 75, believed he would have died in the last year without his VHI as his treatment for cancer would have been delayed by nine months if he had depended on a public appointment.

Maintaining and heating homes was another major concern as was inability to help offspring who had lost jobs. Dr Joe Larragy from NUI Maynooth who co-wrote the report, also called for reform of taxation, saying the system seemed to be designed to tax as little as possible and redistribute as little as possible which left most older people very vulnerable.