Will There Be State Pension Cuts in Budget 2011 ?

The state pension was left untouched in the 2010 Budget – and  there have been calls from a few politicians to leave it alone in 2011.
All welfare benefits were cut in 2010 by about 5% – and it looks like at least similar cuts to welfare benefits could be announced on December 7th.
The recent CSO survey on household incomes in Ireland once again throws up a few statistics and figures that will not help those arguing for no cuts to pensions. (Survey sample size was 5,183 households and 12,641individuals)

One example is the “at risk of poverty” measure.
The CSO did an analysis of the Irish population and their risk of poverty – by age group.
The age group with the highest percentage of risk of poverty  (18.6% ) is  the 0-17 age group and there were  13% of 18 to 64 year olds  at risk of poverty.
The  figure for 65 to 74 year olds is 8.9% (down from 12.1% in 2008) Half that of the under 18’s.

The same survey also shows that the only age group to have in increase in disposable income in 2009 were the 65 to 74 age group – who had an increase of 4.4% to 22,321 Euro.
Other age groups experienced a drop in disposable income – with 0-17 year olds having the biggest a drop of 6.8% to 21,244 Euro.
Last years survey showed that in 2008 the 65-74 age group had a 9.9% increase in disposable income – while 0-17’s were at 3.3%

Last year we reported here  that Households headed by an unemployed person had an increase of  25.2% in their disposable income between 2007 and 2008.
The figures from 2009 show that there was an increase in the disposable income of households headed by an unemployed person of  6.4% (from 35,208 to 37,450).
This compares to working households where disposable income dropped 4.2% to 58,405.

It is hard to justify rising disposable incomes of the  unemployed and pensioners to continue to rise while workers incomes drop.   The minimum wage will be falling by 12% in 2011 – so it is expected that Jobseekers benefits will be reduced by a similar amount. Will the government be brave enough to drop the state pension  also?

Ref:  http://www.cso.ie/releasespublications/documents/silc/current/silc.pdf