Dáil Éireann - Volume 632 - 01 March, 2007

Written Answers. - Anti-Poverty Strategy.

Caoimhghín Ó Caoláin asked the Minister for Social and Family Affairs his views on the reaction by Age Action to the new National Action Plan for Social Inclusion 2007 to 2016 and their disappointment in that it throws little light on the way it is going to address the high number of pensioners at risk of poverty. [8007/07]

  Mr. Brennan: In keeping with the approach taken in the original 1997 National Anti-Poverty Strategy, the new National Action Plan for Social Inclusion 2007-2016 (NAPinclusion) adopts a coordinated approach across a range of policy areas, reflecting the complex nature of poverty and social exclusion, which is multi-faceted in its causes and effects. The Plan, building on the lifecycle approach adopted in the social partnership agreement, ‘Towards 2016’, and complemented by the social inclusion elements of the National Development Plan 2007-2013 (NDP), assesses the risks which individuals face at each stage of the lifecycle and the supports they need to meet these risks. Older people are specifically identified as one of the key life stages in the lifecycle approach.

The vision in the Plan for older people is two fold. Income support will be provided and increased at least in real terms to ensure an adequate standard of living. Supports will be provided and further developed to enable them maintain their health and well-being, as well as to live active and full lives in their own homes and communities for as long as possible.

The high level goals for older people focus on these two areas. The Plan states that investment in community care services for older people will continue to increase, including home care packages and enhanced day care services. The minimum payment rate of €200 per week, in 2007 terms, for all social welfare pensions will be maintained over the course of this Plan and, if possible, enhanced.

The overall poverty goal in the Plan is to reduce the number of those experiencing consistent poverty to between 2 per cent and 4 per cent by 2012, with the aim of eliminating consistent poverty by 2016. The Government in setting the new poverty reduction target has accepted the advice of the ESRI to use an updated set of depri[1658] vation indicators, which focus to a greater degree on items reflecting social inclusion and participation in society. This will see the current measure, based on lacking one or more items from an 8-item index, changing to one based on lacking two or more items from an 11-item index. This revised set of indicators will be used to measure consistent poverty over the course of the new NAPinclusion.

The rate of consistent poverty for older people at just below 4 per cent is lower than that for people of working age at 5.9%. Reasons for this include the fact that older people:

experience lower housing costs;

benefit from the value of non cash benefits;

are more likely to be able to draw on accumulated resources; and

are particularly likely to enjoy support from family members.

The “at risk of poverty” indicator used by the EU does not measure poverty as such, but rather the numbers in households with incomes below 60% of median income, who are deemed to be at risk of poverty. This does not take into account the other resources or access to resources that people have. In the case of older people that would include the benefits flowing from their high level of home ownership, which is much higher than in many other developed countries. It also does not take into account the access older people have to a wide range of services that greatly improve their standard of living and well being.

Neither does the headline “at risk of poverty” threshold reflect the degree to which the incomes of older people are below the threshold. In 2005, of those older people classified as at risk of poverty only 7.2%, or a third, had incomes below the 50% threshold, with the majority having incomes just below the 60% threshold. Taken together with the fact that just 3.7% are classified as being at risk of poverty, the “at risk of poverty” indicator currently gives a misleading impression of the extent of poverty among older people in Ireland.

However, allowing for the difficulties with this indicator, the percentage of older people classified as at risk of poverty dropped a full 7 points from 27.1% in 2004 to 20.1% in 2005. This shows, in particular, the impact of the increased provision made for pensioners in recent years. This impact was measured, of course, before account could be taken of the major increases in pensions provided for in Budgets 2006 and 2007. Budget 2007 delivered on our commitment in the Programme for Government to bring the basic State Pension to €200 a week, in addition to a range of other benefits available to our senior citizens.

The effect of the significant improvements made in pension provision can be best illustrated by the fact that since 1996 pensions have increased by almost 119% or about 57% in real [1659] terms. In addition to these improvements, the means test for the State Pension (non-contributory) has been further relaxed by €10 per week to €30 and the earnings disregard, which was introduced last year to encourage pensioners who may wish to earn extra income to continue in employment, has been doubled from €100 to €200 a week for non-contributory pensions.

The levels of increases provided in Budgets 2006 and 2007, in conjunction with the strategy set out in the NAPinclusion, demonstrates the Government’s continuing commitment to safeguard and enhance the living standards of older people, and to provide them with a fair share of the fruits of our high levels of economic growth, which they have done so much to bring about during their working lives.