What should an adequate old-age income entail to live in dignity?

Special Briefing, January 2015

The issue of income adequacy is particularly relevant for older people, who rely more than any other age groups on the payments from the state or public social security systems – through both contributory (pensions) and non-contributory (social assistance) schemes. AGE has been pioneering this topic for several years, in particular through awareness-raising among the general public and policy makers. Our objective has been, therefore, to provide evidence from the grassroots level on the specificity of poverty risk among older people in vulnerable situations, such as older women, the oldest old, older migrants or those from ethnic minorities.

Although the European Charter of Fundamental Rights ratifies the rights of older people to live in dignity and independence, changing demographics combined with the pressure on public budgets are increasing the risk of human rights violations against older persons. Policy makers are paying less attention to the fulfilment of the rights older people hold as human beings in pursuing purely economic objectives. In some extreme cases, the ongoing budgetary cuts are preventing older people from enjoying their human rights.

In this context, AGE ran a two-year research project (2013-2014) on the adequacy of old-age minimum income schemes. As part of a broader European Minimum Income Network – EMIN and in cooperation with our member organisations in France, Ireland and Poland, the project looked at the issue of adequacy of minimum income protection for older people.

Building on our previous experience in involving older people in policy debate, the project was implemented with the direct participation of older people in the three pilot countries. They took part in workshops discussing what an adequate minimum income should entail to enable older people’s full social participation and inclusion in mainstream society as equal citizens.

Our project debated the concept of ‘reference budgets’, in particular the role they can play in defining and assessing the adequacy of a minimum income. We used an evidence-based methodology (provided by Bérénice Storms from Cebud-Thomas More research team) on defining reference budgets for an adequate old-age minimum income. The goal was not to calculate (monetize) reference budgets for older people per se, but rather to define what an adequate old-age minimum income should entail in a given national context i.e. including essential physical and social needs that enable older people to participate fully in society. Indeed, reference budgets have a clear normative interpretation. Every item (good or service) included in the basket has a societal function, describing precisely the roles the person able to afford this item may be able to satisfy.

Main findings from the EMIN project:

• The study indicates the same definition of social participation across the three pilot countries. Further commonalities were observed in the identification of essential goods and services and of the respective underlying needs identified in the three countries as being necessary for full social participation;
• Despite these commonalities, significant differences were observed regarding the adequacy of old-age minimum income protection and the validity of the 60% poverty line in the respective national contexts;
• This suggests a question about the relevance of measuring poverty with income-based tools only, such as the 60% threshold of the median income.

AGE main recommendations to policy makers:

• When defining the adequate level of old-age minimum income, refer with cautiousness to the relative poverty threshold – this measure provides information about income distribution within society, but does not address the question of needs that different population groups or the most vulnerable persons may have;
• Develop reference budgets for an adequate old-age income using baskets of goods and services adapted to specific sub-groups – break down population 65+ by gender and by cohorts 65-75, 75-85 and over 85 years old – in order to reflect the evolving needs older people have as they age, e.g. higher cost of long-term care for the oldest old;
• When developing reference budgets for older people, take account of non-monetary aspects, such as access to quality health and long-term care services, education and long life learning, decent housing, leisure and social activities or civic participation, in order to show the way autonomy and individual competences can be strengthened.

The findings and policy recommendations from the project were presented during a final EMIN conference held on 4 December 2014 in Brussels. At this occasion, AGE launched a publication: ‘What should an adequate old-age income entail to live in dignity? – Learnings from France, Ireland and Poland’.

We hope that the EMIN project has initiated a continuing policy focus and debate on income adequacy across the whole life span at both national and EU levels, as older people’s well-being and dignity are at stake, in particular in times of economic restraint and austerity measures.

Useful links

• • AGE press release: ‘Always consider people’s dignity when defining minimum income in old age‘
  • AGE publication: What should an adequate old-age income entail to live in dignity? – Learnings from France, Ireland and Poland
  • Website of the EMIN project: https://emin-eu.net/
  • AGE work on minimum income: www.age-platform.eu/age-work/age-policy-work/social-protection
  • AGE work on poverty and social inclusion: www.age-platform.eu/age-work/age-policy-work/social-inclusion

For more information on AGE input to the project, you can contact Maciej.kucharczyk@age-platform.eu