Ireland’s Budget 2025, unveiled on October 1, 2024, coincided with the International Day of Older Persons, a timing that Age Action, the country’s leading advocacy organization for the elderly, described as a missed opportunity to provide long-term financial stability for the nation’s aging demographic. While the government announced a series of increases and one-off payments aimed at easing the cost-of-living crisis, Age Action’s policy adviser, Nat O’Connor, warned that the measures fail to address the systemic erosion of the state pension’s value. The organization argues that the €12 weekly increase for those in receipt of a full state pension is insufficient to restore the purchasing power older people held four years ago, leaving many vulnerable to poverty and material deprivation.
The State Pension and the Failure of Benchmarking
The centerpiece of the social protection package in Budget 2025 was the €12 increase in the weekly state pension. However, Age Action pointed out that this figure falls significantly short of what is required to keep pace with the cumulative inflation experienced since 2020. According to Dr. O’Connor, the state pension would need to be increased by a total of €30—an additional €18 on top of the €12 granted—to match the value it held at the start of the decade. This lack of alignment with the actual cost of living has led to what advocacy groups describe as "income insecurity" for a generation that increasingly relies on fixed state supports.
A primary point of contention for Age Action is the government’s continued delay in implementing a system of benchmarking and indexing for the state pension. Benchmarking involves setting the pension at a specific percentage of average earnings (often cited as 34% of average weekly earnings), while indexing ensures that the rate rises automatically in line with inflation or wage growth. Ireland remains an outlier in Western Europe in this regard. Most neighboring jurisdictions have established mechanisms to protect the real value of pensions, providing retirees with "peace of mind" and predictability. The absence of such a framework in Ireland means that pension rates remain subject to annual political discretion rather than economic reality.
Energy Poverty and the Fuel Allowance Reform
One of the more positive aspects of Budget 2025, as identified by Age Action, is the reform of the fuel allowance means test for those aged 66 and older. Older people are at a disproportionate risk of energy poverty due to two primary factors: the biological reality that the human body retains less heat as it ages, and the fact that older people are more likely to live in Ireland’s older, more poorly insulated housing stock.
The government’s decision to grant wider access to the fuel allowance through a more generous means test for the over-66s was welcomed by Dr. O’Connor as a significant step toward combating energy poverty. This change is expected to bring thousands of additional households into the scheme, providing a vital cushion during the winter months. However, while the expanded eligibility is a victory for advocates, the underlying issue of the "thermal efficiency" of homes remains a long-term challenge. Data from the Sustainable Energy Authority of Ireland (SEAI) suggests that retrofitting older homes is a slow process, and for many elderly residents, the fuel allowance remains a necessary survival mechanism rather than a luxury.
The Stagnation of Support for Older People Living Alone
Perhaps the most stinging critique from Age Action regarding Budget 2025 is the perceived abandonment of older people living alone. The Living Alone Allowance, a supplementary payment for those who do not have the benefit of a shared household to split costs, has remained largely stagnant since 2022, when it was increased by a mere €3. In Budget 2025, the allowance saw no core increase, a move Age Action describes as a "repeat of last year’s failure."
The economic reality for single-person households is stark. Recent research cited by Age Action indicates that an individual living alone bears approximately 79% of the costs of a couple, yet the social protection system often provides them with barely more than half the income of a two-person household. This disparity has led to a dramatic spike in material deprivation. In 2023, older people living alone were twice as likely to experience material deprivation compared to 2020 levels, and nearly three times as likely as couples aged 65 and over.
Material deprivation, as defined by the Central Statistics Office (CSO), involves the inability to afford basic necessities such as heating, new clothes, or a meal with meat or a vegetarian equivalent every second day. The fact that this metric is rising among the elderly suggests that the "rising tide" of Ireland’s economic growth is not lifting all boats.
Gender Inequality and the Pension Gap
The failure to support those living alone also has a significant gender dimension. Six out of ten older people living alone in Ireland are women. Consequently, the stagnation of the Living Alone Allowance and the inadequacy of the state pension increase disproportionately affect women, compounding an existing 35% gender pension gap.
This gap is often the result of historical labor market inequalities, including the "marriage bar" that existed in Ireland until the 1970s, which forced women to leave the workforce upon marriage. These historical injustices translate into lower PRSI contributions and smaller private pensions for women today. Age Action argues that by failing to target support at single-person households, the government is effectively entrenching gender-based poverty in old age.
Transport and Social Inclusion: The Universal Companion Pass
A bright spot in the budget for Age Action was the announcement of a universal companion pass for those aged 70 and over, set to be introduced in September 2025. This measure allows an older person to bring a companion on public transport free of charge. For many years, advocacy groups have highlighted the "transport inadequacy" that plagues rural Ireland and prevents older people from accessing healthcare, social activities, and essential services.
The companion pass is seen as a simple but transformative improvement. Many older people find traveling alone difficult or impossible due to mobility issues or cognitive decline. By allowing a friend, relative, or carer to travel with them, the state is facilitating greater social inclusion and reducing the isolation that often leads to declining mental and physical health. While the delay until September 2025 was noted, the policy itself is viewed as a pragmatic response to the needs of the most vulnerable.
Analysis of Economic Implications and One-Off Payments
The Irish government’s strategy in Budget 2025 relied heavily on "one-off" cost-of-living payments rather than permanent increases to core social welfare rates. These included double pension payments in October and December and a series of energy credits for all households. While these lump sums provide immediate relief, Age Action and other NGOs like ALONE and the Society of St. Vincent de Paul (SVP) have argued that they do not solve the underlying problem of inadequate weekly income.
Economists have pointed out that while one-off payments are less of a long-term burden on the exchequer, they do not provide the "income security" that Nat O’Connor emphasized. For an older person trying to budget for the entire year, a core increase in the pension is far more valuable than a sporadic bonus. The reliance on one-off measures suggests a government hedging its bets against future economic downturns, but for the elderly, it creates a "cliff-edge" effect where they are left wondering if similar supports will be available in the following year’s budget.
Chronology of the Advocacy Campaign
The dissatisfaction expressed by Age Action is the culmination of a months-long advocacy campaign. In the lead-up to the budget, the organization submitted a detailed list of requirements to the Department of Social Protection and the Department of Finance.
- Spring 2024: Age Action begins consultations with older people across Ireland, identifying the "restoration of 2020 value" as a primary goal.
- Summer 2024: Pre-budget submissions are published, calling for a €30 increase in the state pension and the immediate benchmarking of rates.
- September 2024: Advocacy groups intensify pressure as inflation data shows that while the rate of price increases has slowed, the "level" of prices remains high, particularly for food and energy.
- October 1, 2024: Budget 2025 is announced. While some wins are recorded (Fuel Allowance, Companion Pass), the core pension increase of €12 is met with immediate criticism for being "below the breadline."
Broader Impact: A Demographic Shift
Ireland is currently undergoing a significant demographic shift. According to the CSO, the number of people aged 65 and over is projected to hit 1 million by 2030. This "aging of the population" requires a fundamental rethink of how the state supports its older citizens. Age Action’s reaction to Budget 2025 serves as a warning that the current "ad-hoc" approach to pension increases is unsustainable.
The organization’s call for a rights-based approach to aging emphasizes that older people should not have to rely on the "generosity" of the government of the day, but should instead have their income protected by law. As Ireland approaches a general election, the treatment of older people in Budget 2025 is likely to become a key talking point. With older voters traditionally having higher turnout rates than younger demographics, the government’s failure to meet the €30 increase threshold requested by Age Action could have significant political ramifications.
In conclusion, while Budget 2025 offered some concessions to Ireland’s older population—most notably the expansion of the fuel allowance and the companion pass—the overarching sentiment from Age Action remains one of disappointment. The failure to restore the state pension to its 2020 value and the continued stagnation of the Living Alone Allowance highlight a systemic gap in how the state perceives and supports its most vulnerable older citizens. For Dr. O’Connor and Age Action, the fight for benchmarking and indexation remains the primary objective to ensure that retirement in Ireland is characterized by dignity rather than deprivation.
