Brussels, 5 October 2006
To: EU Ministries of Employment, Social Affairs and Health
Re: The Fifth European Round Table Conference on Poverty and Social Exclusion
Dear Madam/ Sir: As the Fifth European Round Table on Poverty and Social Exclusion will be one of the key events in the social policy agenda during the Finnish Presidency, AGE, the European Older People’s Platform, would like to take this opportunity to engage in an open discussion on how to make progress on eradication of poverty and social exclusion. This annual round table should also facilitate a dialogue between all stakeholders in the context of the Open Method of Coordination (OMC) for social inclusion, and reinforce their mutual commitment to promote solidarity and social justice in the European Union. AGE takes a keen interest in the debate around social inclusion, especially measures affecting people in old age (i.e. minimum incomes, pension rights, social assistance to the most vulnerable), and very much appreciates the efforts of the European Commission to pursue the open consultation on these issues with social partners and civil society organisations. AGE also welcomed the Peer Review and Assessment in Social Inclusion Programme launched by the European Commission. This exercise gave the participants the possibility to have an in-depth discussion about policies implemented in several Member States to fight against poverty and social exclusion of older people. The national reports released in the framework of the Peer Review on minimum pensions and older women’s poverty also contributed to this debate, by identifying challenges Member States are facing to promote active inclusion. We hope that the Peer Review and Assessment in Social Inclusion Programme will consequently help Member States to propose concrete solutions. Based on an in-depth analysis of the national reports on minimum pensions and older women's poverty and on the feedback received from our members, AGE would like to
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make recommendations as regards policy measures in combating poverty and social exclusion among older people, in particular women: Inclusive, Adequate and Better-Indexed 1st pillar schemes Lack of indexation to national standards of living in 1st pillar schemes lead to a greater risk of poverty among older people which increases over time and is particularly concerning for older women who live longer and have lower old-age income. Basic pensions should be inclusive, ensuring that all older people including women receive an adequate amount for a dignified life in old age, given that women often have little or no other pension income. Promotion of carer credits to combat older women’s poverty Research stresses the importance of carer credits to compensate for missed social insurance contributions (mostly among women who face caring duties during the course of their working lives). AGE welcomes initiatives introduced in some Member States which go in this direction. More exchange of experience is needed to help all Member States in promoting work/private life reconciliation for women without increasing the segregation and indirect discrimination faced by women at present. Further analysis of the socio-economic cost/benefit of carers’ credits is also necessary, with special attention paid to the already existing policy measures facilitating/impeding the recognition of women’s atypical work careers across the EU.
Towards individualisation: Independent pensions for women The individualisation of pension rights, in which women are able to accumulate an adequate pension entitlement, is to be encouraged as the ultimate objective supporting gender equality. To achieve that: AGE recommends that measures are put in place to increase independent pension entitlements of women over time to the level of men’s - through increased women’s employment, equalisation of pay and measures such as carer credits. Great caution should be applied in the phasing out of survivor’s benefits. AGE calls for these benefits to be retained until the necessary measures are in place to ensure full individual pension rights to all women. Setting-up of a broader spectrum of indicators when evaluating poverty risk (i.e. home ownership, access to transport) Due to lack of earnings and pay gap, older women are less likely to own their own home when they reach pension age. Difficulties in affording independent and decent accommodation increase their exposure to poverty and social exclusion. At the same time, for some older home owners, the cost of home maintenance is often unaffordable, as they are unable to carry out repairs and maintenance themselves. Lack of access to adapted transport (public and/or private) is another factor associated with poverty and which excludes older people, especially those with limited mobility
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(mainly older women, who are more likely to have a disability than men at the same age). 1 Additional indicators are needed to get a clearer picture of poverty risks amongst older people, in particular older women and the very old. Equal treatment for women and men in 2nd and 3rd pillar pensions Since Member States are relying more and more on 2nd and 3rd pillar pension schemes to achieve an adequate replacement rate at old age, AGE asks to Revisit the exceptions allowed under Article 4 for actuarial calculations in the insurance field (i.e. longer life expectancies of women in private pension schemes). Put an end to gender discrimination of women in private pension schemes (persisting despite the adoption of the Directive on Gender equality in access to goods and services). Where a scheme is operated by an employer, women and men employees should have equal access to it, without the indirect discrimination posed by long vesting periods. Measures should be also put in place to extend access to complementary pension schemes to all, including low paid jobs and sectors where women are predominantly employed. AGE also asks for more research to be done on the real life expectancy of younger women (those who presently contribute to 2nd and 3rd pillar pensions scheme). A recent study by Professor Claude Aubert concludes that the younger generation is most probably going to have a shorter life than today’s older people. This is particularly true of women who are even more exposed than men to pollution, health risks, stress, obesity, tobacco, etc. 2
Access to objective and comprehensive information Further improvement in access to information for the most vulnerable population (i.e. older migrants, computer illiterate people) is needed. We believe that the Open Method of Cooperation (OMC) in social protection and social inclusion is the right process to exchange experience and good practice in this field. Taken into account the growing complexity of pension systems, we ask Member States to provide objective, reliable and comprehensive information to all citizens. This needs be done in a user-friendly way (cf. orange envelop in Sweden), and should empower relevant independent stakeholders (for example seniors organisations) to serve as information multipliers. Comprehensive integration policy towards older migrant women In most Member States migrant women are at higher risk of poverty and need of social assistance. This is due to a combination of factors: eligibility criteria (for example high number of years of residence in the country); their lack of contribution to the pension
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http://www.who.int/healthinfo/statistics/gbd1990regiondaly2002.xls WHO statistics show that women are more exposed at disability risk than men when getting older, within the same age category. 2 Aubert C., Espérance de vie: la fin des illusions, Terre Vivante, 2006 3
system (they often participate in the informal economy); limited knowledge and understanding of the system; their rights and how to access these rights. AGE expects Member States to define a comprehensive integration policy measures towards older migrant women, providing them with the same rights and obligations, as those guaranteed to other legal residents of the European Union. Following the latter principle, also old migrant parents, allowed to the EU territory under family reunification policies, should be covered by this policy, in particular in terms of their eligibility to national old age pension schemes. Broader range of career paths used in projections Most of the available studies on the impact of pension reforms use for their projections a full-time-full-career average male earner’s profile. Unfortunately, this profile no longer reflects the vast majority of today’s workers (women in particular), and a more diverse range of earners profiles. Using a broader range of career paths will provide a more accurate prediction of older women’s poverty rate in the future, enabling policymakers to reform statutory pension schemes so as to achieve an acceptable replacement rate for all. AGE asks to broaden the profiles currently used in national, EU and OECD projections, in order to take better account of the entire spectrum of workers, in particular women (with gender and age groups). We believe that a more diverse definition of the earner’s profile will help to identify the phenomenon of older women’s poverty and to better understand its major cause, namely women’s lack of attachment to the labour market (more part-time work, higher prevalence of career breaks amongst women, lower paid jobs in sectors where complementary pension schemes are not available).
A comprehensive approach to analysis poverty risk among older women While examining poverty risk among older women, and in particular in the context of pension reforms, AGE would also like to see additional issues to be researched, such as: Impact of part-time work on eligibility to pension rights. Impact of reforms in the eligibility criteria for pensions, namely increase in the required minimum number of years for contribution. Women employment in informal economy, i.e. immigrants, citizens from the recently acceded Members States, as well as the impact of their non-declared work on social security coverage and poverty risk in old age. Once carefully identified and analysed, AGE calls for specific policy measures to address all these issues. Extended thematic coverage for studies on reforms impact and adequate indicators As reforms in other areas of social protection (health, social services, transport, etc.) can have a huge impact on the poverty risk of pensioners, in particular among the very old (mostly women), we ask to:
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Take into account the gender dimension and age factor in impact analysis. In some countries our experts report that reforms undertaken in the last decade in the statutory sickness scheme for pensioners have contributed to a considerable reduction of their purchasing power, a situation not reflected by the indicators used at present. Provide a fuller and more precise picture of the diversity of situations faced by the various groups of older women and men, AGE asks the EU to continue efforts in searching for more accurate indicators and research tools, able to take better account of the risks faced by the most vulnerable groups of existing and future pensioners.
We look forward to learning about the outcome of your deliberations. Yours sincerely,
Anne-Sophie Parent Director
Steen Langebaek President
Cc: • • •
Commissioner Špidla, Commissioner for Employment, Social Affairs and Equal Opportunities; Mr Ottaviano Del Turco, President of the Employment and Social Affairs Committee in the European Parliament; Mr Tom Mulherin, Chair of the Social Protection Committee
AGE - the European Older People's Platform is a European network of organisations of people aged 50 plus and over. It brings together 150 organisations from across the European Union and represents over 22 million older people in Europe through its membership. AGE seeks to voice and promote the interests of the 150 million inhabitants aged over 50 years and to raise awareness of the issues that concern them most. For more information, please contact AGE Secretariat: 111, rue Froissart B – 1040 Bruxelles Tel.: +32.2.280.14.70 Fax : +32.2.280.15.22 www.age-platform.org
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