Archive for September, 2010

Older People, Poverty and the Welfare State

Lorna Roe is the Social Policy Officer (Social Partnership) with Age Action Ireland, the national charity for older people. Age Action work with, and on behalf of, older people endeavouring to make Ireland the best place in the world in which to grow older by protecting vulnerable older people and promoting positive ageing through its services and policy work.

Apparently, as the word on the street goes, grey is the new black since our economy hit its first double quarter of negative growth.  At least that is the opinion of a number of commentators. A popular, if indeed corrosive theory, has emerged that says older people have remained untouched in this period of ‘downward adjustment’ or indeed are the net gainers among those reliant on state income. This is something Age Action would very much like to challenge.

A useful starting point is the position of older people before the recession. The point has frequently been made that older people have not contributed enough to their country in the recession.  We find this interesting as previous to 2008, older people were second among age groups most at risk of poverty. In fact the figure in 2007, 16.6% (high by any standard) was a dramatic decrease since the dizzyingly high level of 44% in 2001.  Older people were a very vulnerable group before this recession and its’ number of devastating cuts even began.

However as social welfare was maintained and wage levels decreased between 2007 and 2008, rate of poverty among older people decreased 5.6%, to a rate of 11% in 2008.  However, a point made by the CSO in their analysis of EU SILC 2008 data warrants attention. This is a statistical success:  “It should be noted that income levels of this group are typically close to the ‘at risk of poverty’ threshold and therefore their at risk of poverty rate can change significantly due to either movements in the thresholds or their income.” (CSO, 2009) Older people largely live on incomes close to the poverty threshold and as such remain in a situation of financial vulnerability living from one week to the next in this recession.

The bold truth is 86% of older people would be at risk of poverty with no state transfers.

When transfers are made this rate drops to 11%. State transfers are therefore an exceptionally successful poverty reducing measure.  Indeed compared to the EU where on average, social transfers reduce poverty risk by 38%, the Irish reduction of 73% for older people is nothing short of remarkable. However, it underscores the nearly pure reliance of older people on state income.

Another fallacy suggests means testing the state pension. The  table below shows us compelling reasons to avoid this. If only from a purely administrative point of view, setting up a system for means testing would hardly be worthwhile considering the small numbers it would affect. Only 2% of older people earn in the top income decile before state transfers. The majority (93%) of older people earn income in the bottom half of the income decile scale.

Table 1 Distribution of persons by SILC 2008 income band by age group: 

Income excluding social transfers[1]

Decile 

1 

<213

2 

<256

3 

<296

4 

<341

5 

<398

6 

<451

7 

<524

8 

<612

9 

<770

10 

+770

65+ 84.3% 2.4% 2.3% 1.9% 2.1% 1.2% 1.5% 1.1% 1.3% 2.0%
Income including social transfers
65+ 7.3% 11.8% 27.1% 14.5% 7.7% 7.1% 7.6% 6.2% 5.2% 5.4%

Only 32% of older people have an occupational pension and according to findings from the SHARE Ireland[2] data only 13% have a personal retirement savings account. While on the other hand SHARE also found 20% of older people still have a mortgage on their home, 26% owed money and 32% were in a household which had some difficulty in making ends meet.

The Irish government views work as the route out of poverty[3]. However, the vast majority of older people are in retirement (92%) and of those who do work, the majority work part time in agriculture and fishing sector.

The jobs market offers little scope for older workers and indeed FAS offers no training courses to those that do wish to supplement their income with paid employment.

Moving from discussing income to discussing services, Age Action have monitored a number of searing cuts in the last 12 months.

  • Loss of the Christmas bonus/ a 2% cut in yearly income;
  • The medical card was means tested;
  • A number of services were severely curtailed for Medical Card holders (notably dental services);
  • A prescription charge of 50cent per item was introduced (from October 1st);
  • Payment thresholds for Drugs Payment Scheme increased by €20 to €120;
  • Over 1,300 hospital beds have been closed;
  • Day care for older people has been reduced (in some cases closed completely);
  • Home care services and hours have been reduced in many cases;
  • The amount of home helps provided this year was 6.4% below what was planned;
  • 44 national Bus Eireann routes have been closed since January 2010;
  • Night Time & Evening Rural Transport has been terminated;
  • Over 50% of county councils were not providing housing grants in July 2010;
  • Rationing Eye Testing on medical card.

This trend of decommodification could not happen at a worse time for older people, many of whom need these services to run and heat their homes and stay in good health. Looking at the table below, based on research using CPI data from the Central Statistics Office, we can see that despite overall CPI decreasing between January 2008 and July 2010, many goods demonstrated remarkable price inelasticity.

Price trends of key goods and services January 2008- July 2010.

Good/ Service Price +/- Good/ Service Price +/-
CPI Overall -2.9% Travel
Home Heating Taxi +8.2%
Liquid Fuel -3.2% Petrol +11.2%
Bottled Gas +17.8% Diesel +4.2%
Piped Gas -4.7% Motor Tax +6.7%
Electricity +3.3% Driving License +0.9%
Solid Fuel +9.8% Insurance
Health Car Insurance +14.8%
GP Fees +8.15% Health Insurance +32.8%
Dental Fees +17.7% Dwelling Insurance +43.6%
Prescribed Drugs -11.2% General
Therapeutic Aids and Appliances +9.7% Refuse Collection -2.8%
Hospital Services +12.1% Newspapers/periodicals
+5.4%

(Data from the Central Statistics Office)

The increases in home heating particularly affect older people who are more likely to live in homes with no central heating that are prone to dampness. This is worrying as older people are more likely to spend greater periods of time in their homes. For the quarter of older people who live lone, typically on lower incomes, this is particularly cumbersome.

The increases in health costs, in the context of a third of older people living with a disability and 60% living with a chronic disease is worrying, particularly so for the 54,000 older people currently without a medical card. The associated 33% increase in the cost of health insurance renders this safety net unaffordable for many older people. Finally, despite the free travel card, the cost of travel for many has increased where public transport is unavailable[4].

Overall, Age Action cannot accept that older people have been cushioned from cuts in this recession. Older people were struggling going into this recession and they will struggle coming out of it as a result of cuts in benefits and services. To judge them as beneficiaries would be to add injury to insult. Older people are among very vulnerable groups. It is essential those groups act in solidarity in protecting those who cannot afford to take further cuts in the coming months.

Visit www.ageaction.ie


[1] Figures on income excluding social transfers from PQ_2409010. Figures from income including social transfers obtained through correspondence with the Central Statistics Office.

 

[2] Survey of Health Ageing and Retirement in Europe.  Irish data: http://geary.ucd.ie/share

[3] Government of Ireland (2008) Report on Strategies on Social Protection and Social Inclusion 2008-2010

[4] EU SILC analayis in 2009 found 44% of older people living alone and 33% of older couples were unable to access public transport.

Minimum Income Standards Essential for Social Protection & Recovery

Paul Ginnell is the Policy and Support Worker with European Anti-Poverty Network Ireland. Paul’s role is to support people experiencing poverty and social exclusion and their organisations, many of which are members of EAPN Ireland, to understand and to contribute to policy making in Ireland and the EU.

Minimum income or social welfare payments are a fundamental right and provide an essential safety net for people who have no work or other means to support themselves. At their most basic level, minimum income schemes are one of the cornerstones of the modern welfare state, and the mechanism by which the state can step in and ensure that an individual’s basic needs are met, and prevent extreme deprivation, homelessness etc.

The right to minimum income is an important component of a democratic society and such schemes are the basis from which every person in society can have a dignified life.

Minimum income schemes exist in all EU Member States apart from Italy, Greece and Hungary. However, formulation and implementation is the responsibility of the Member States themselves and such schemes vary greatly across the EU in terms of their quality, the levels paid and the conditions that apply to accessing them etc. In many cases they are insufficient to allow people to live with dignity, access services and employment/training opportunities, and participate fully in the society in which they live.

Individual Minimum income levels in almost all EU Member States, including Ireland, are below the 60% (of median income) at-risk of poverty line and are therefore insufficient to lift people out of poverty.

In Ireland the social welfare rate in 2010 is €196.00, while the at-risk-of poverty line (in terms of income for an individual) stands at €238.69.

Minimum income schemes currently face multiple threats: rising prices are squeezing their purchasing power, active labour market policies are increasing the conditionality of benefits, and people on minimum income are increasingly labelled as lazy and stigmatized for being in receipt of these payments. The European Anti-Poverty Network is centrally involved in a political campaign  to examine how a standard for minimum income could be developed and implemented across the EU: one which would ensure an acceptable and dignified standard of living for all.

There are strong arguments which support the need for an adequately high level of minimum income:

  • Minimum income schemes are a key instrument in preventing poverty and social exclusion, as long as the levels are sufficient to take people out of poverty.
  • They give vulnerable people the long term security they need to engage in pathways to employment, greater social participation and inclusion. For example, those with; disabilities, long-term sickness or mental health problems, and those vulnerable due to their age, family commitments, or where quality jobs are not available.
  • They are a catalyst for fair wages if wage levels are linked in a positive hierarchy to decent levels of minimum income.
  • Member States have already committed at EU or international level to ensure adequate income, but the implementation of these commitments has been weak.
  • In the current economic crisis, they not only prevent hardship for those without jobs but provide an essential floor to consumer spending to boost the economy.
  • Above all they provide a solid foundation for a socially cohesive society, built on solidarity.

In 1992 European leaders agreed a recommendation reaffirming the fundamental right of all EU citizens to a minimum income that is adequate for a dignified life. This was further confirmed in the 2008 European Commission recommendation on the active inclusion of people excluded from the labour market, which recommended that all Member States develop an integrated approach to providing adequate minimum income, linked to adequate services and pathways to employment.

As part of its campaign EAPN is lobbying for a stronger EU legal basis in the form of a Framework Directive, aimed at guaranteeing an adequate minimum income for all. Such a Directive was one of the recommendations contained in the synthesis report on minimum incomes by the EU national experts on social inclusion who reviewed Member States minimum income schemes in 2009.

On 24th September EAPN will host a conference on Minimum Income in Brussels involving its members, including EAPN Ireland, policy makers and others in order to move forward the debate and campaign on minimum income.

One of the workshops in the conference will focus on the use of Essential Minimum Budgeting Standards, benchmarks that have been developed in many Member States as a way of identifying the real income needs of different family types based on the actual cost of a basket of goods. The Vincentian Partnership for Social Justice, the organisation that carries out this research in Ireland, will be presenting the Irish experience. This method is one possible way of benchmarking minimum income levels against the real cost of living. The VPSJ have just released the impact of Budget 2010 on the real cost of living and revealed a €76.52 gap between the actual cost and the supports received for an individual over 25 years on Jobseekers Benefit. This is an increase of €8.30 from 2009.

EAPN Ireland will be actively engaged in the campaign for minimum income for a dignified life and is currently a member of the Poor Can’t Pay campaign lobbying against cuts to social welfare payment in the budget. We’ll be releasing a more detailed policy briefing on minimum income policy shortly.

Visit www.eapn.ie for more information on poverty, social exclusion, minimum income standards and social protection.

Please do comment on the content of the blog! All comments are approved by a moderator so please be patient if your comment does not appear straight away. Only libelous or profane comments will be deleted.

EAPN Ireland to Partner in New Initiative To Link Community Groups to European Union Policy

EAPN Ireland is delighted to announce its participation in a new initiative from the European Commission: NGO EU Connect. This initiative, which provides information on funding, policy, institutions and contact points is a welcome development for NGOs involved in anti poverty work, and especially for EAPN Ireland in meeting the needs of its 250 members. Crucially, at a time when collective action has never been so important, NGO EU Connect will help to build more effective coordinated engagement with European policy and politics. EAPN Ireland will act as one of the custodians in what marks an important development in strengthening NGO-EU interaction.

Although Europe continues to be an important policy space, to some extent we have lost the comprehensive grassroots connection that was so important during the earlier Structural Funds period. In these difficult times we need to rediscover the innovation, risk taking and partnership processes that came with European membership; attributes that were considered the norm in those dynamic days.

Social inclusion NGOs like EAPN Ireland are essentially about participation, ensuring that the voices of the most marginalised are heard and form an important part of policy formation and decision making. To that end EAPN Ireland has sought to build and support information systems that encourage community groups and equality focused organisations to engage with the European policy dimension. Our web-based information systems are widely used for this purpose, but our particular expertise is the interpretation and analysis of EU policy, so there is a strong complimentarily between EAPN Ireland and NGO-EU Connect.

This development will enhance the links between NGOs and European institutions and policy processes, and will help to address the frequently cited weakness in the democratic connection between the citizen and the institutions of governance.

We look forward to working with the European Commission, our partner NGOs and our members on this project into the future. We’re particularly excited about the interactive shared learning opportunities and we’ll be doing our bit to ensure that the site develops into a living, organic and immediately useful contact point for community and voluntary organisations. We have already had some discussions with the European Commission Office on how this initiative can be developed to meet the needs of our members and community and voluntary organisations in Ireland. We’ll be releasing information on those plans next week so keep an eye on our activities through the website, or our facebook and twitter presence. Drop us an email if you’d like to subscribe to news, analysis and information from EAPN Ireland.

Visit: http://www.ngoeuconnect.ie


Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 43 other followers

Blog Managed by European Anti Poverty Network Ireland

Equity House
16 Upper Ormond Quay
Dublin 7
+353-(0)1 8745737
www.eapn.ie
enquiries@eapn.ie

Contributions

We encourage and welcome contributions in the comments section. Comments are approved by EAPN so may take some time to appear. Comments will only be withheld where libel/defamation occurs. We're also interested in hearing from potential contributors. If you want to get in touch, contact mark@eapn.ie

Follow EAPN Ireland on Twitter

Error: Twitter did not respond. Please wait a few minutes and refresh this page.