Skip to main content

Do not pay workers the old-age pension until they turn 70

Do not pay workers the old-age pension until they turn 70
PEOPLE should not get the State pension until they reach the age of 70, the country’s leading economic think-tank says.
Moving the statutory retirement age to 70 would counter a fall in the workforce and the rise in the number of pensioners, the Economic and Social Research Institute says.Reform that increases the current statutory retirement age by five years would roughly correspond to the projected increase in life expectancy.Raising the pension age, the study finds, could more than offset the impact of demographic change on the State budgets.
It comes after reports this week that Social Protection Minister Regina Doherty has been warned of a pensions “time-bomb” that has seen the State’s bill spiralling by €1bn every five years due to our ageing population.The Government has said it hopes to be able to give a rise in the State pension that exceeds the rate of inflation in this year’s Budget, while Fianna Fáil is also pressing for increases.
Getting rid of the mandatory pension age of 65 is something that was backed by the Citizens’ Assembly last weekend.The ESRI paper by Dr Karina Doorley found that countries all over Europe are struggling with the cost of ageing populations.“A shrinking labour force, combined with a growing old age dependency ratio, is expected to reduce tax revenues and raise pension expenditures,” she wrote in an academic paper.
Dr Doorley said there was a need to raise the statutory retirement age to 70.PEOPLE should not get the State pension until they reach the age of 70, a State-supported think tank has recommended.Moving the statutory retirement age to 70 would counteract a fall in the workforce and the rise in the number of pensioners, the Economic and Social Research Institute (ESRI) said.
The analysis says that retirement age reform that increases the current statutory age by five years roughly corresponds to the projected increase in life expectancy.Raising the pension age, the study finds, could more than offset the impact of demographic change on the State budgets.It comes after reports this week that Social Protection Minister Regina Doherty has been warned of a pensions “time-bomb”, with the State’s bill spiralling by €1bn every five years due to our ageing population.
The Government has said it hopes to be able to give a rise in the State pension that exceeds the rate of inflation in this year’s Budget, while Fianna Fáil is also pressing for increases.But Ms Doherty’s officials have warned pensions account for the single largest block of the department’s expenditure at €7.2bn this year.
Getting rid of the mandatory pension age of 65 is something that was backed by the Citizens’ Assembly last weekend.The ESRI paper by Dr Karina Doorley found that countries all over Europe are struggling with the cost of ageing populations.“A shrinking labour force, combined with a growing old age dependency ratio, is expected to reduce tax revenues and raise pension expenditures in the future,” she wrote in an academic paper.
She noted that demographic change meant Ireland could expect its workforce to get older, although it will also be more skilled.The latest Census figures show that the over-65 age group saw the largest increase in population since 2011, rising by more than 100,000 to close to 640,000.Dr Doorley said there was a need to raise the statutory retirement age to 70 across Europe.
“The analysis also shows that a retirement age reform that increases the current statutory retirement age by five years in each European country, roughly corresponding to the projected increase in life expectancy, could more than offset the impact of demographic change on fiscal balances,” she said.
The State pension age has already been raised.Since 2013, the minimum retirement age for the State pension scheme is 66. It is rising to 68 in 2028.The Citizens’ Assembly recommended last weekend the abolition of the mandatory retirement age.This is where people are forced to retire at the age of 65, yet do not qualify for the State pension until at least a year later.The assembly also wants some form of compulsory supplementary pension scheme for the roughly one million workers who will only have the State pension when they retire
The Mint, New Delhi, 2nd November 2017

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Firms with sales below Rs.50 crore out of ambit

The tax department has reiterated that the PoEM rules, which require foreign firms to pay taxes in India if the effective control is here, will not apply to companies withaturnover of Rs.50 crore or less inafinancial year. Last month, the tax department had come out with the longawaited Place of Effective Management (PoEM) rules, which require foreign companies in India and Indian firms with overseas subsidiaries to pay local taxes if their businesses are effectively controlled by Indians. Then the rules did not setathreshold above which they were to apply. However, the accompanying press release states that the rules will not apply to companies withaturnover of up to Rs.50 crore inayear. That created confusion whether the threshold will be adhered to. Inacircular to clarify things, the Central Board of Direct Taxes (CBDT) said the provision "shall not apply toacompany havingaturnover or gross receipts of ~50 crore or less inafinancial year".

PoEM rules essentially target shell …