Retired people are at a much lower risk of poverty than younger people

Brendan Burgess

Brendan Burgess

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Interesting data from the ESRI

Poverty, income inequality and living standards in Ireland

This report – funded by the Community Foundation for Ireland – brings together data from household surveys collected by the ESRI and the Central Statistics Office to create the first harmonised set of indicators on incomes, income inequality and poverty covering the period 1987 to 2019. These...
www.esri.ie www.esri.ie

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That's because as a cohort they are rich and under taxed. There was a time when they were poor and needed support and we constructed our taxation and welfare structure accordingly. Now they are rich and don't need those supports but the structures remain the same.
A far more targeted approach is necessary. Things like free travel and medical cards should be means tested. They should pay the full rate of PRSI since it's very unlikely that they contributed enough to fund their State pension over their working life. Social transfers should be given to those who needs them, not to those who don't.

I'm sure there'll be lots of the usual "I/they worked hard all their life" entitled nonsense in response.
 
There are 7 of us who are friends since schooldays , all retired from what are essentially seen as middle class jobs teachers, bankers , a bakery owner and a cafe owner.
All married with spouses retired or just about to retire from very similar type jobs.
At a recent night out we were discussing our respective financial situations and the common consensus was that each of our households , give or take , were netting an income of approximately €5,000 a month
We all were extremely grateful and realise that we are lucky in that this largesse cannot continue into the future although we should be OK .
Perhaps means testing is the way forward.
 
The data shown in the original post appears to be based on SILC surveys carried out by the CSO and ESRI.
These random surveys could not be considered definitive.
 
I have moved the free travel discussion here:

Should we get rid of free travel of OAPs?

Things like free travel and medical cards should be means tested. Ideologically, I would agree with you. But in practice, the free travel is a real benefit to people and should be as widely available as possible. In fact, for environmental reasons, I might extend it to everyone. Brendan
www.askaboutmoney.com
 
ashambles said:
Any time I'm abroad I use trains, it's the best way to travel. In Ireland they're too expensive and crowded, it's cheaper and more pleasant to drive and pay for parking. That's not great for the environment.

Why are they so expensive? At least in part because of free travel. Over 1m people have access to free travel, probably about 25%+ of the adult population.

Free travel means Irish Rail have had a free hand to demand price hikes. For Irish Rail they can charge what they like because a large section of their users simply don't care - the government is going to hand over the cash for them. (Many people don't understand how the system works - they genuinely think Irish Rail is letting them on for nothing).

Free travel is great for OAPs, but in a limited form - maybe off peak (like it used to be) and with a reasonable number of journeys per year before a reduced ticket price kicks in.
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We shouldn't be giving free anything to anyone who can afford to pay for it.
 
I read the report and what is striking is that poverty rates are calculated before the cost of housing provision is taken into account. Income which is spent on housing provision is treated as if it is descressionary. If the objective it to show what real levels of poverty and income inequality are then that renders much of the report meaningless. Descressionary income is what matters, descressionary income being "Income that remains when all income taxes and compulsory payments have been made. Discretionary Income - Income left over after taxes and essential spending."
If a household has an after tax income of €4000 a month but is spending €2000 on housing then their real descressionary income is €2000 (less whatever else we regard as "essential spending"). If we are worried about the impact of higher fuel prices on people on low incomes, and we should be, and we talk about fuel poverty in that those higher fuel prices eat into descressionary income, then we should be talking about the cost of housing in the same way. It would be very interesting to see the income distribution graph when that was factored in.
 
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Sophrosyne said:
The data shown in the original post appears to be based on SILC surveys carried out by the CSO and ESRI.
These random surveys could not be considered definitive.
Click to expand...
The SILC surveys have one of the largest sample sizes of any survey carried out in Ireland, it is stratified sample so each section of the population is represented in proportion to its size and it uses a methodology which is standardised across all EU countries. So it is as definitive as you can get.
 
@Purple,

yes, correct, the first measure of poverty, AROP, is before any household expenditure.

It looks solely at income. It is still useful.

There are other measures of poverty, for example material deprivation, which try to take a broader picture.
 
Protocol said:
@Purple,

yes, correct, the first measure of poverty, AROP, is before any household expenditure.

It looks solely at income. It is still useful.

There are other measures of poverty, for example material deprivation, which try to take a broader picture.
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I've often argued against increases in the State Pension at it gives more money to rich people but from this report it does have a material impact on the small cohort of pensioners who are poor.

Maybe removing the Age Tax Credit and levying the full rate of PRSI and USC on retirees while increasing the State pension would be a fairer option.
 
Protocol said:
There are other measures of poverty, for example material deprivation, which try to take a broader picture.
Click to expand...
There is a trade-off here as there is so much subjectivity. Questions are along the lines of "are you able to afford a holiday once a year?".

Person A might be able to answer yes as they don't smoke or drink and Person B might answer no as they spend the cost of a holiday on cigarettes. Person A and Person B have the same income but have a different subjective assessment of whether they are in poverty.

I personally like to complement with consumption-based measurement of poverty and inequality. Consumption surveys are very expensive to run and are only done once every five years by the CSO. They also throw up funny results where people seem to spend much more than their income, particularly at the low end. They also find that people claim they only drink half ss much on alcohol than the Revenue excise data suggest

What I'm getting at is that poverty is multi-faceted. You have to look at a range of indicators from income, material deprivation, and consumption. For these surveys remember that people lie consciously or unconsciously, to a greater or lesser extent. Details of personal finance is really taboo. There's a reason why this forum is 98% pseudonymous!
 
@NoRegretsCoyote, excellent points but things like rent or mortgage payments and the cost of childcare or eldercare provision are reasonably well defined and objective items.

It's also noteworthy that much of the expenditure associated with eldercare is tax deductible but far less expenditure associated with childcare in similarly supported.
 
Purple said:
We shouldn't be giving free anything to anyone who can afford to pay for it.
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Agreed. As a Type 2 Diabetic, (something that came about due entirely to my own unhealthy and hedonistic lifestyle some years ago) I am eligible for a long-term illness book which gives me free medication and blood testing equipment for the rest of my life. I could well afford to pay for these, but because I don't have to pay for them, I don't! The HSE shouldn't be giving me this benefit.
 
Groucho said:
Agreed. As a Type 2 Diabetic, (something that came about due entirely to my own unhealthy and hedonistic lifestyle some years ago) I am eligible for a long-term illness book which gives me free medication and blood testing equipment for the rest of my life. I could well afford to pay for these, but because I don't have to pay for them, I don't! The HSE shouldn't be giving me this benefit.
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Nothing is free, it is all paid for, either individually or communally.

The way to address inequalities is via a progressive taxation system.

If older retired people are drowning in cash then tax their income.
If they hold mutlitple properties then tax those properties.
If they have an income stream from investments or equities, then tax those sources too.

If retired people are dying with millions in the bank, then raise death duties too.
 
@Groucho "hedonistic lifestyle " out of curiosity was it food, sweet things or alcohol related that your diabetes originated from?
 
Allpartied said:
Nothing is free, it is all paid for, either individually or communally.

The way to address inequalities is via a progressive taxation system.

If older retired people are drowning in cash then tax their income.
If they hold mutlitple properties then tax those properties.
If they have an income stream from investments or equities, then tax those sources too.

If retired people are dying with millions in the bank, then raise death duties too.
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Your solution to inequalities seems to be to impoverish everyone?

Why shouldn't retired people who have saved and worked hard throughout their lives be allowed enjoy the fruits of it?

The alternative of living hand to mouth and worrying about bills in retirement is dystopian.
 
T McGibney said:
Your solution to inequalities seems to be to impoverish everyone?

Why shouldn't retired people who have saved and worked hard throughout their lives be allowed enjoy the fruits of it?

The alternative of living hand to mouth and worrying about bills in retirement is dystopian.
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i'm not suggesting that, far from it.

Taxation should apply to all income, to all property and to all wealth.

If you means test the state pension, or free travel, or access to healthcare, then you do impoverish those who saved, or prepared for their retirement.
But, of course, parsimony and diligence are only part of the story. If you have lots of money, lots of property and lots of wealth, you will be able to have a very lavish retirement and so will be able to pay a bit extra for the public services that you use.
 
Is the notion that the majority of older people are wealthy based on anything other than home ownership?
If so what is it?
 
Sophrosyne said:
Is the notion that the majority of older people are wealthy based on anything other than home ownership?
If so what is it?
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Wealth is wealth. How people choose to hold that wealth is their business.
Descressionary income is a different but relevant issue.
 
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