Last weekend yours truly met a number of this column’s readers at the Over 50s Show at the RDS.
At the three seminars that I gave, the same three questions arose from each of the audiences: ‘Is my money safe?’ ‘Is my pension safe?’ and ‘how long will this recession last?’
After last week’s Budget, I think it’s probably fair to say that our money is as safe as the Government says it is.
That means if you already have a state and occupational pension they are absolutely safe, and as for the recession, it looks like it’s going to be ‘a doozy’, a favourite expression of my late mother who was 10 at the height of the Great Depression.
Instead of targeting:
* the ‘patriotic’ rich who live offshore/park their money there
* the wealthy land bank owners who were not taxed on their idle inventory
* benchmarked and indexed civil servant’s salaries and pensions and
* even our billion euro a year, but mainly redundant army (that will lose a few barracks, but not a single soldier off the payroll), Mr Lenihan took his filleting knife to pensioners, families and middle earners.
Where do I start? The cack-handedness of the Government in the handling of the medical card debacle was extraordinary, somewhat clawed back though not entirely on Tuesday morning.
Then there’s the one per cent levy on all incomes except social welfare ones; the halving of medical and dental expenses.
But, despite Government efforts to allay fears yesterday (Tuesday) there are still pensioners who remain without a medical card they had until last Tuesday’s gloomy Budget.
There may yet be some retrenchment – such as the novel suggestion the Government pay to the private health insurers the premium arrears for any person over 70 who gave up their insurance plan when they received their medial card (in the belief that they didn’t need the private cover anymore).
This would allow the person to rejoin their scheme and not have to worry about the 10 year exclusion period for any new medical condition they may have developed since holding their medical card.
If that doesn’t happen – and it is a very long shot – the ex-private health member can rejoin their old (or a new) health insurance company and at least be covered for any condition or treatment unrelated to their pre-existing one.
They need to make sure, however, that includes cover for outpatient costs, usually up to 50 per cent of the charge. Because the medical card did nothing to speed up access to in-hospital treatment, a good private health insurance plan is always a good idea if you can afford one.
Accident and emergency charges have also risen to €100 from €60 in the Budget, – without a GPs letter or a medical card that is.
And if you no longer have a medical card but need A&E treatment for relatively minor events – like broken limbs or burns, then you should consider to one of the new private emergency treatment clinics springing up around our cities.
They charge a minimum average cost of €100 plus, but this fee can be claimed against income tax (at 20 per cent only from next year) or against a good private health insurance policy. These centres are clean, comfortable, free of hospital acquired viruses and you will be seen very quickly.
Unfortunately, the bad news for pensioners doesn’t end with the medical card debacle. Deposit interest retention tax (DIRT) has also gone up which will affect older people the most since they depend most on bank savings to top up their pensions.
If your income is not above the tax-free threshold of €20,000 for an individual and €40,000 for a couple, then you will pay the higher DIRT and exit taxes.
The new rate is 23 per cent DIRT (instead of 20 per cent) on deposit income and an investment fund exit tax of 26 per cent instead of 23 per cent.
If you have your life savings of €50,000, say, sitting in a five per cent interest account, you will now pay an extra €75 a year, or €575, from the €2,500 interest you earned. Capital gains tax is also up two per cent to 22 per cent – and this will affect the sale of shares or other assets like property, art, antiques, etc.
This economic downturn is only starting. It was Irish government policy that got us into a situation where a billion euro budget surplus a year ago has turned into a €15 billion deficit.
We need to rediscover the power of family, friends and community again if we are to ensure that the vulnerable among us do not suffer disproportionately.
Next week: What families must do to survive this Budget (and next year’s too).