Work-life balance, women in poverty and gender pension gap: gender equality on the agenda of European Parliament and Council

While the Parliament has put emphasis on the fight against poverty of women in a recent report, the Council of ministers of social affairs has also supported action to fight poverty of women in conclusions negotiated under the Slovakian presidency. The Council calls for the implementation of the Commission’s roadmap on work-life balance, the proposed European pillar of social rights, and to include two new indicators on the at-risk-of poverty rate of migrant women and of inactive women, including by age groups. The Parliament went further and supports the call for recognising care periods through care leave arrangements, employee-driven flexible working time, care credits in pension schemes and supporting services. AGE welcomes many of the points taken up by the Parliament and the Council, but considers that some points are missing.

Challenges to older women’s pension adequacy

With the 2015 Pension Adequacy Report, the European Commission highlighted the increased risk of old-age poverty for people who cannot contribute throughout their working lives in order to constitute an adequate old-age pension. Older women living alone are most at risk of falling in old-age poverty, as they often had little chances to engage in employment throughout their lives due to care duties on one hand, and, on the other hand have on average a longer life span and a larger proportion of their lives living in bad health than men. The erosion of pensions of the very old due to inflation and reduced indexations, and in some member states the inadequacy of minimum pensions play a major role in this.

Commission proposals and actions on work-life balance

One way of addressing the issue was presented by the European Commission in the form of a roadmap on work-life balance, sketching out legislative and non-legislative measures to encourage a more equal sharing of care tasks in the family and higher employment rates for women. The roadmap contained the possibility of legislative actions to credit parental and care leaves in pension schemes and to create minimum standards on carer’s leaves. During 2016, a public consultation, in which AGE took part, and two consultations of social partners took place to explore the possibilities of drafting legislation.

Parliament’s calls on carer’s leave, care credits and investments into care services

To support the initiatives, the Parliament has adopted two important resolutions, one on ‘creating labour market conditions favourable for work-life balance’ and one on ‘poverty: a gender perspective’.

The resolution on work life balance calls to take into account the increasing diversity of family relationships, including grandparenting arrangements and to include a life-cycle approach in work life-balance policies. It calls for ‘adequate income replacement and social protection during any type of family- or care-related leave’, and calls for a carer’s leave directive which would come to supplement the provision of professional care, provides adequate remuneration and social protection and employee-driven flexibility in working arrangements. More specifically, the Parliament calls to map the state of the ‘right to request flexible working arrangements’ in EU member states. It also calls for care credits in the building up of pension rights to protect people who reduce their working time because of care duties from old-age poverty.

At the same time, the Parliament calls for investment into affordable social services, including elderly and dependent care services and independent living schemes with universal access. The Parliament also proposes to grant free access to care services for families living in poverty and social exclusion. The Parliament calls for the introduction of targets on care for elderly persons similar to the Barcelona targets on early childcare. It proposes to create European quality standards for all care services, explicitly mentioning the European Quality Framework for Long-term Care Services.

Parliament support for the work on women and poverty

The Parliament resolution on poverty recognised that older women belong to the groups of women that are more affected by the risk of poverty and social exclusion and analysed many of the reasons for which older women may end up in poverty, including the responsibility for the care of older, ill or dependent family members and children, resulting in a gender pension gap of 39%. It also highlights the negative influence of budget cuts in the area of social security and care services. To combat old-age poverty, the Parliament underlines the role of public services and the need to prioritise the reconciliation of private and professional life, including for people with care duties for dependent persons. The resolution also contains a call for regulations on carer’s leave.

On the side of incomes, the Parliament stresses the need for access to quality jobs without discrimination, but also the problem of the persisting gender gaps in employment rates, working hours and salary. It calls for the Commission to provide an assessment of minimum income schemes in the EU that would take into account economic and social circumstances of each member state, and urged the member States to introduce national minimum pensions that protect from the risk of poverty. The Parliament called to adjust pension systems to ensure adequacy and equality between women and men and to share pension rights in cases of divorce and legal separation. It also expressed its concern about occupational pension schemes that are increasingly run in accordance with insurance principles that may result in gaps in social protection. It also highlighted that occupational pension schemes are tied to the principle of equal treatment in employment, as the European Court of Justice regards them as pay.

Council conclusions taking up many of the Parliament’s points

The Council conclusions, adopted under the Slovakian Presidency of the Council, take on board many of the Parliament’s calls. Older women figure prominently in the Council conclusions, especially for older women living alone. It recognises that gender gaps in poverty begin to increase at the age of 55-64 and is highest in the 75+ group. As a cause, the Council mentions the gaps in labour market participation, but also higher life expectancy of women and differences in pension age that lead to lower pension entitlements for women. The Council also notes that care responsibilities and the lack of care services and measures to facilitate work-life balance may be linked to the differences in poverty rates.

The Council proposes two new indicators of measuring gender differences in poverty, most notably by including an indicator on the share of women and men who are inactive by age and migrant background. It calls on member states and the Commission to include the gender dimension in all social policy initiatives in the future. To promote gender equality in employment, the Council suggests to focus on inequality in careers, labour force participation and earnings and to facilitate access to pension entitlements. Targeted support should be available for those whose careers have been temporarily interrupted due to care responsibilities. Specific work life balance measures should include, for the Council, quality care services, paid or unpaid care leaves and flexible working arrangements for women and men and especially for carers. Social protection should prevent and fight women’s poverty, including in old age, by strengthening the coverage of social protection in non-standard employment. Pension systems should enable both men and women to earn adequate pension entitlements and appropriate compensation for those with care responsibilities.

Anti-poverty strategies should include other policies, such as elderly care and health care. To know more about female poverty, more data should be disaggregated by sex and age.

The Council encourages the Commission to push ahead with the initiatives on work-life balance and to further monitor the situation of poverty and social exclusion and the interplay with other factors

AGE: good start, but Council lacking ambition

AGE welcomes the Parliament reports and the Council conclusions, which can be an important step to show that the agenda on improving work-life balance and fight the poverty of older women has a consensus between the European institutions. AGE particularly welcomes the support of the Parliament raising attention to the links between employee-driven flexibility, quality care services and care leave measures with the poverty of older women. The labour market reintegration of persons coming out of care periods is crucial, as is the need for increased coverage by social protection of care periods and non-standard employment. The proposed new indicators are also welcome. However, several points are insufficiently covered in the debate

  • Carers need support themselves, not only by care services for dependent persons, but also by adequate training, respite care facilities and peer-support. These are not expressed in these documents
  • The link between pension systems and old-age poverty of women is not sufficiently stressed in the Council conclusions. While the Parliament highlights the impact of divorce and legal separation legislation, the Council stays silent on this issue, which is the cause of the stark differences in poverty rates between older women in couples and those living alone. The link with occupational and personal pensions is not made either and no call is made by the Council to monitor minimum income schemes and minimum pensions.
  • Neither the Council nor the Parliament highlight the differences in health between men and women: while women live longer on average than men, they can expect approximately the same amount of ‘healthy life years’ – meaning that women spend a larger share of their life with diseases. The rising costs of health care, also due to reforms during the crisis, mean that many older women have higher financial needs for treatment, care and medication than men.
  • While the Council recognises the importance of care services, it does not echo the call of the European Parliament for an investment initiative or European targets on the provision of long-term care. Investment is however needed to provide services that allow family members to stay in employment and to face the prospect of rising care needs due to demographic developments.
  • While a new indicator on inactivity by migrant status, age and sex are welcome, there is still a lack of indicators covering especially the population 75-84 and 85 and more in terms of gender and poverty status, to account for differences between men and women and between the old and the ‘very old’.

AGE therefore calls for a strategy on tackling poverty of older women that tackles all of these points and will continue to push for clear commitments by member States to end the gender pension and poverty gaps.

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