Growing concern over women’s pension gap

15 February 2017

February 2017

CIPD Ireland put in a submission on the National Women’s Strategy 2017–2020 in January and commented on the fact that women have a lower rate of pension coverage than men. We also identified that maternal gaps in labour market participation exacerbate this problem and called on the government to take action which not only addresses the State’s overall pensions funding gap, but also the bigger pension gap experienced by women. We called on the National Women’s Strategy to acknowledge this concern, how it contributes to greater poverty among older women in Ireland, and to consider funding mechanisms to cover employment gaps and build a more equitable society.

This month an Age Action research report has shown that the State pension scheme itself is unfairly affecting women. Changes in 2012 resulted in thousands of retired workers losing more than €1,500 a year, with women pensioners suffering the most, commonly for taking time out of the workforce to care for their families. CIPD supports Age Action’s call for the 2012 cut to be reversed and for the incomes of these pensioners to be restored.

The Age Action findings

The Age Action report identified that changes to the bands within the State pension contributory system introduced by the government in 2012, resulted in almost 36,000 people receiving a lower level of payment than they otherwise would have done. The level of lost income ranges from just under €30 per week to just under €19 per week. Over 40 per cent of all those affected are losing almost €30 per week or €1,500 per year.

Drawing on the Department of Social Protection’s own statistics, the report found that there is a significant disproportionate impact on women. Almost two-thirds, or 62 per cent, of all those affected are women and almost double the number of women to men experience the largest drop in monetary terms of almost €30 per week. In addition, more than half of all women who were granted a State contributory pension over the four year period since the band changes were introduced are affected, compared to 21 percent of men.

Summary

The 2012 changes reduced the weekly pension payment to those with lower yearly average contributions, caused by being out of the labour force, and penalised women who took time out to care for their children.

CIPD urges:

  • The government to reverse the 2012 pension changes and for the incomes of these pensioners to be restored.
  • The Department of Justice and Equality to outline actions to address the pension inequalities for women as a central plank of the forthcoming National Women’s Strategy.
  • The Department of Social Protection to implement process to both review and future-proof pension provision to ensure that it does not inadvertently effect those who may have be out of the workforce, whether though parenting or illness.
  • The government to ensure that proposals on universal pension coverage take account of the lower pension coverage by women, their lower wages and gaps in employment, and provide funding supports to deliver equitable pension coverage.