Notes on the Front

The Government repeats the mantra – we didn’t touch pensions, we didn’t touch pensions. They’ve been saying that since the beginning of the crisis even though they have cut the incomes and living standards of the elderly (e.g. cutting the Christmas Bonus, co-payment for medical card prescriptions, carbon tax which regressively hits low-income households, etc.).

And they still keep repeating their mantra that even though now they have actually cut the incomes for a considerable proportion of the elderly. But that proportion is made up of public sector pensioners. And they don’t count even though they make up 20 percent of all recipients of state-paid pensions.

The Government announced an overall cut of €100 million in public sector pensions – or about 4.5 percent. They did it on a sliding scale, exempting the first €12,000. The reductions on the next tranches are:

• Between €12,001 and €24,000: – 6 percent
• Between €24,001 and €60,000: – 9 percent
• Balance above €60,001:          – 12 percent

Such has been the propaganda over public sector pay and pensions that many people are convinced that both workers and pensioners are well-off and can afford ever more hits. However, the Department of Finance’s Analysis of Exchequer Pay and Pensions Bill 2010 allows us to put some of these myths to rest.

There are (in 2010) approximately 103,000 public sector pensioners. The pension bill is approximately €2.2 billion. That makes for an average payment of €416 per week. It should be remembered that these pensioners don’t receive the state’s old age pension.

Now I know that we are supposed to be in retro living-standard mode – cutting wages and incomes back to 2007 levels (but, of course, debt is never reduced in these devaluationist fantasies). But it’s a bizarre day when €416 a week becomes ‘living beyond one’s means’; though, admittedly we’ve had a run of bizarre days of late.

But, as we know, averages can be skewered. A better measurement would be the median payment – that is, the level at which 50 percent are paid above and 50 percent paid below) – but that is not provided. However, we can extrapolate from CSO data that shows the median public sector wage to be 83 percent of the average public sector wage.

If this holds for pensioners, then 50 percent of public sector pensioners receive less than €350 per week. Therefore, we probably wouldn’t be too far off the mark to estimate that 60 percent of pensioners receive less than the average payment. I stress, this is only an extrapolation; it would be far preferable to have official data. But this median level is approximately what a full-time minimum wage earner grosses (watch this space, though, for minimum wage cuts).

Another piece of data we don’t have is how many pensioners are caught by the cut. Pensions below €12,000 are exempt but we don’t know how many that is. But we can assess what happens to the average and median pensions:

• Average Pension payment:  €577 cut
• Median Pension payment:   €369 cut

All this is pretty much hidden from the debate. Over 20 percent of the state’s pensioners have found their rates cut and yet the Government can still get away with saying ‘they didn’t touch pensions’ (it helps when you don’t even mention the cut in the ‘Summary of 2011 Budget Measures').

It seems that some pensioners just don’t count.