Opinion USC and PRSI to be integrated?

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Sophrosyne

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I hope we don't end up with the worst of possible worlds - a progressive tax system and an equally progressive PRSI system.
 

torblednam

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The minister announced the setting up of a working group to merge these into a single social insurance payment.

This would be a good idea, if the insurance is ring fenced and put in the person's own name.

PublicPolicy.ie has a paper on it here:

Integration Of PRSI And USC
which is a reprint of their article in the Irish Times:

Budget 2018: If PRSI and USC are merged, what should the rate be?
This notion of millions of ringfenced social welfare accounts seems to be your current hobby horse Brendan, but apart from being a lovely hypothetical idea, how would you see it being implemented in the real world?

Particularly in the context of a State with a very high national debt, which currently spends about 10bn more on social welfare than we collect in PRSI.

To do what you're saying, in the future all current PRSI receipts would have to be ringfenced away somewhere, and the money to pay social welfare to the millions of recipients with entitlements accrued under the old system would still need to be funded from somewhere...
 

Brendan Burgess

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Hi mandlebrot

If we were starting from new, do you think it would be a good idea?

I think it's a good idea and we should move towards it. It would take a generation to implement in full.

But we should make a start.

Start by linking the pension to the person's PRSI record. If someone has not got enough in their account, then don't give them the contributory pension.

Cut the non-contributory pension.

Bring the family home into the means test.

Increase PRSI to a level which would fund a person's pension.

Brendan
 

llgon

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Cut the non-contributory pension.
This is clearly a non-runner for all political parties/TDs as can be seen from the budget and the reaction to it, where the opposite happened.

The general public/taxpayers appear to overwhelmingly want a non-contributory pension that gives a good standard of living. How much higher can the state afford to go when ring-fenced contributions are added?
 

torblednam

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Hi mandlebrot

If we were starting from new, do you think it would be a good idea?

I think it's a good idea and we should move towards it. It would take a generation to implement in full.

But we should make a start.

Start by linking the pension to the person's PRSI record. If someone has not got enough in their account, then don't give them the contributory pension.

Cut the non-contributory pension.

Bring the family home into the means test.

Increase PRSI to a level which would fund a person's pension.

Brendan
I don't know Brendan, it's just so unrealistic and politically unfeasible that I don't see the point in working out how good an idea it is.

Some people would say that if a person manages to not accrue enough PRSI to qualify for a non means tested pension, that the State has failed them.

On the other extreme of the spectrum would be those who'd say pffffft to that notion; the lazy scrote who never worked a day shouldn't continue to get beer and sky sports money from the rest of us ad infinitum, and should be culled at a certain point.

The cohort of people who would agree with your proposal would probably fall somewhere slightly closer to the latter than the former on the spectrum, but that group would not be big enough to carry the day to push through such fundamental change. You'd need an awful lot of turkeys to vote for something Christmas shaped to do what you're proposing. Never gonna happen.
 

Brendan Burgess

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Some people would say that if a person manages to not accrue enough PRSI to qualify for a non means tested pension, that the State has failed them.
They might say that, but it wouldn't make that much sense. The state should work out the cost of the contributory pension and make sure that anyone who receives it contributes enough for it.

Brendan
 

Brendan Burgess

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This is clearly a non-runner for all political parties/TDs as can be seen from the budget and the reaction to it, where the opposite happened.
Hi Ligon

I have pointed out before that because something is politically unpopular is not a reason for not suggesting it.

We have a completely unsustainable system. It will go bust at some stage. The sooner we address it the better.

Brendan
 

Sophrosyne

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Start by linking the pension to the person's PRSI record. If someone has not got enough in their account, then don't give them the contributory pension.
What would you do about Widowed Persons Contributory Pension?

What if a person was widowed at a young age and doesn't have sufficient PRSI contributions?

What about the Invalidity Pension?
 

Brendan Burgess

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Hi Sop

They would all be subject to the same rules.

If there is a fund in place, they draw down from their fund.

If there is no fund in place, they would get non-contributory social welfare.

The Widows Pension is crazy. A guy dies at age 25 and his 22 year old wife gets a pension for life???? That makes no sense.

Anyone who wants it could pay into a separate private life insurance scheme or a private permanent health insurance scheme.

Brendan
 

Purple

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What if a person was widowed at a young age and doesn't have sufficient PRSI contributions?
The Widows Pension is crazy. A guy dies at age 25 and his 22 year old wife gets a pension for life???? That makes no sense.
I agree with Brendan. Unless they remarry the widow or widower gets the pension for the rest of their life, regardless of their income, unless they remarry.
Therefore if the widow is a lawyer earning €200,000 a year they get a pension but if they are on €25,000 a year and re-marry they get nothing.
 

Sophrosyne

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The reason I mentioned the widowed persons pension and invalidity pension was because of an over-emphasis in the discussion on old age pensions, where people have the whole of their working life to build up their pension pot.

The social insurance fund pays for:

· Jobseeker's Benefit
· Illness Benefit
· Maternity Benefit
· Adoptive Benefit
· Health and Safety Benefit
· Invalidity Pension
· Widow's, Widower's or Surviving Civil Partner's (Contributory) Pension
· Guardian's Payment (Contributory)
· State Pension (Contributory)
· Treatment Benefit
· Occupational Injuries Benefit
· Carer's Benefit

Brendan’s solution is to have a ringfenced personal social insurance fund to draw on for any of the above. But where the personal funds are, at that time, insufficient for any of those payments, then people should receive means-tested benefits.

Means-tested benefits are paid out of general taxation rather than the social insurance fund.

The logical conclusion to that is while there would be a growing social insurance fund, more money would have to be set aside from general taxation to pay for means-tested benefits.
 

Purple

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The logical conclusion to that is while there would be a growing social insurance fund, more money would have to be set aside from general taxation to pay for means-tested benefits.
I think the overarching drive here is to stop beggaring our children's children in order to pay for pensions and benefits which we can't afford, haven't paid for and don't deserve. It is morally reprehensible.
 

Purple

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Sweeping statement!
Yep, but this is a discussion forum. If enough people had a problem with spending money which their children and grandchildren had to pay for then there would be broad support for reform. That support isn't there so I come to the above conclusion.
 
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