herald

Tuesday 25 June 2019

Fianna Fail vows 'fight to the death' over pensions

Minister Regina Doherty
Minister Regina Doherty

A "fight to the death" over changes to the old age pension in the next Budget has been declared, as the latest €5 hike kicks in.

Fine Gael and Fianna Fail are set for a major clash over Government plans to link future increases with the rate of inflation.

The move would be likely to result in hikes being significantly less than the €5 extra a year which has become standard.

Social Protection Minister Regina Doherty wants to introduce a rate of payment that is explicitly associated to changes in consumer prices and average wages.

However, she said it cannot be done "in isolation" and needs cross-party support - which will not be forthcoming from Fianna Fail.

Election

At Fine Gael's national conference over the weekend, she said: "Some of the noises I'm hearing aren't very positive."

The Government needs support from Fianna Fail to get Budget 2020 through the Dail under the confidence and supply agreement. A row over pension increases will immediately heighten the expectation of a general election this year.

Fianna Fail's social protection spokesman Willie O'Dea told the Herald he will "fight to the death" to prevent the move toward indexation.

"A lot of people on pensions are at or below the poverty line. If you just index pensions for inflation, you'll lock them into poverty," he said.

In the 12 months to the end of February, the Consumer Price Index rose 0.6pc. An increase to the €243 contributory pension linked to that amount would be around just €1.50.

However, Mr O'Dea argues this is not reflective of increases in living costs.

"The headline inflation figures don't factor in the type of things people on basic incomes buy. The national figures include yachts and Ferraris," he said.

"A number of studies have been done, showing that if inflation here is at 1-2pc, it is up to 4-5pc for people who were living week-to-week. This is a typical Fine Gael move to keep the poor in place."

A €5 increase in social welfare payments announced by Finance Minister Paschal Donohoe in last October's budget kicks in today.

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