Minimum Incomes and Women's Poverty

Host Country : Belgium

Place and date : Brussels , 20.6.2006

Peer countries : Czech Republic - Finland - Germany - Ireland - Latvia - Portugal - United Kingdom

Rather than presenting a particular national project, Belgium has opted to stimulate a general discussion among peer reviewers on the subject of pensions policy and the specific situation of older women's poverty

The 2005 Peer Review indicated that a number of recent reforms have strengthened minimum pensions, by increasing them faster than other pensions (as in Spain and Portugal) or by introducing new benefits (as in the UK). These reforms are having an impact on pensioner poverty levels, and are generally improving the adequacy of pensions for those that have traditionally been unable to accrue sufficient rights. Such groups tend to be those on low wages, those suffering from illness and incapacity, those with incomplete work careers and those with unpaid caring responsibilities both for children and for elderly relatives (this is a particular problem for women). Moreover, older women pensioners have tended to be disproportionately affected by low pension accrual, as social security systems used not to recognise caring responsibilities. Also, in many cases, the expectation used to be that women would be supported by their spouse's pension provision.

Despite the obvious benefits of indexing minimum pensions to general developments in pay, this does raise other issues, such as a weakening of the contributory principle - why contribute to social security systems if you are guaranteed a minimum pension of a reasonable standard? Similarly, where minimum incomes are indexed to prices, this may lead to an increase in relative poverty. Women pensioners may be particularly affected by this, as they generally live longer. Poverty in the older groups of pensioners is usually significantly higher than that of their younger pensioner cohorts, and these groups are at a very high risk of poverty compared to the population as a whole.

Minimum pensions that are means-tested could be an effective way of targeting resources to the most vulnerable groups, and have proved successful in a number of member states. However, this too, though, raises a number of challenges. For instance: how can take-up of the entitlement be encouraged? Which incomes should be taken into account, and which disregarded? How does means-testing affect incentives to save? How does it interact with other government assistance?

Belgium therefore proposes that Member States discuss the following points (this list is not exhaustive, nor do Member States have to cover all areas):

Delivery mechanisms for minimum pensions and the success of such methods.
Projections of the impact of such policies in terms both of future poverty levels and of future economic behaviour (for example, potential impacts on saving).
The interaction of minimum guarantees with other benefits (such as housing or assistance with utility bills).
How people on low income are identified (other measures than income for defining and describing poverty).
What particular measures can be taken to tackle poverty among women and minority ethnic groups.
If the benefits are means-tested, what income/wealth is taken into account, how is this information collected and which resources are not taken into consideration?
What is the public perception of poverty-alleviating measures?
Is the take-up of benefits a problem?
How are the benefits indexed – is there an issue of greater poverty for older pensioner cohorts?

Agenda - | en |

Peer Review manager

Ms Monika Natter ( ÖSB Consulting GmbH )

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Minimum Incomes and Women's Poverty

Host Country : Belgium

Place and date : Brussels , 20.6.2006

Peer countries : Czech Republic - Finland - Germany - Ireland - Latvia - Portugal - United Kingdom

Peer Review manager

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