So you pay taxes, and you pay Insurance into the big scheme.
A moment comes in your life, usually a significant life changing one, where you go to claim back from the scheme, i.e. - maybe its a new child or you've lost your job, you are sick or have reached retirement age.
You have lived a normal life til now and nearly everything you make is accounted for at the end of the month. This new cost or circumstance is something you can't handle.
So you rock up to the Department of Social Welfare and you says...
"there's me PPS number, you can see me stamps - i need to get some of the money that i contributed, back. Traumatic event and what not eh?"
And they say
"well we'll have to means test you, you can't have money unless you really need it"
but says you,
"but that guy there, he never put any money in at all - why is he withdrawing money from my insurance fund?"
"Well you see, that fellow has never had a job and so as never worked and never contributed, so he is in real need of benefits"
"no benefits - charity is the money we take from you for foreign aid"
Means-test free travel and state pensions
Why does your means matter when it comes to collecting from an insurance scheme?The report proposes a number of options to reform the state pension scheme, including:
• Introducing either a universal pension regardless of contributions or a lifetime's work, or else a means-tested pension scheme.
• Means-testing the household benefits package – the ESB, gas and telephone allowances – and the free travel scheme.
• Increasing or decreasing the state pension for late or early retirement, to encourage people to stay in work longer.
• Linking retirement age, which will be 68 by 2028, to life expectancy after that date. This means payouts by the State will not extend significantly.
• Bringing more "flexibility" in allowing retirees to combine their state pension and wages from work, to encourage people to stay in employment longer.
The means-testing of the state pension is one of the more radical reforms contained in the document, and would have to be costed carefully.