For the first time, people over the age of 66 years old will have to pay PRSI under controversial new proposals.
The Pensions Commission wants to remove a special exemption that allows people over the age of 66 to avoid paying Pay Related Social Insurances on their social income.
With future governments faced with the challenge of maintaining funding for the state pension, the commission believes that older people should contribute as an act of solidarity.
Weekly incomes over €100 will face a charge rate of 4%, however, this will not apply to private or public sector pensions and income salary for an individual over 66 who is still working.
The charge will apply to anyone over the age of 66 who is getting income from savings, dividends, investment returns, or rental income.
The Pensions Commission has recommended significant changes which includes linking rises to inflation and offering greater flexibility in relation to when people can start accessing payments.
One option is to allow those who began working earlier on in their lives to retire at 65, one year earlier than the current retirement age.
It also recommends that those who want to keep working until 70 should be allowed to build up pension credits.
It has also been revealed by the Irish Independent that the state pension age will not reach 67 until the year 2031.
Minister for Social Protection Heather Humphreys stated, “The Commission unambiguously established that the current state pension system is not sustainable into the future and that change is needed.”
However, this move to impose PRSI on pensioners is likely to be seen as an unjust tax on Ireland’s elderly population.
IMAGE (left) – “File:Dáil Éireann – Election of Taoiseach – 27 June 2020 (50050917608).jpg” by Houses of the Oireachtas from Ireland is licensed under CC BY 2.0