2. Adequacy, fairness and sustainability of Europe’s social protection and inclusion systems

Increased life expectancy and the improved health of older people is one of the proudest achievements of recent social and economic development in Europe. However, in the aftermath of the crises the debate about Europe’s ageing has focused almost exclusively on the impact from the increased pension expenditure and deteriorating old-age dependency ratios on public finances.

Older people are consequently represented as a burden to society and their significant contribution to national social security systems or their role in helping younger people through intergenerational transfers and solidarity remain most often underestimated or merely unrecognised.

AGE seeks to promote an individual right to adequate pension for all. The intergenerational perspective seems to be a suitable framework to address the issues of both adequacy and sustainability of national social protection systems as this is important not only to older people but to society as a whole.

Therefore, AGE Platform Europe calls on the candidate MEPs to:

2.1  Ensure the effective application of the Lisbon Treaty’s transversal social clauses 8, 9 and 10 in the implementation of the Europe 2020 Strategy while integrating a strong social dimension into the European Semester

Background: The last EU Treaty, the Lisbon Treaty (2009), contains a transversal “social clause” whereby social issues (promotion of a high level of employment, adequate social protection, fight against social exclusion, etc.) must be taken into account when defining and implementing all policies. The aim is to ensure that policymakers at EU and national levels keep a close eye on the social impact of all new legislation. Social dimension is also firmly placed in the Europe 2020 Strategy through the headline targets on poverty and employment.

More recently, in its communication on the social dimension of the Economic and Monetary Union (EMU), the European Commission pointed out the persisting social and economic divergences among EU Members States as a major challenge for further development of the EMU. To deal with criticism regarding the lack of social considerations in economic policy coordination, further deepening of social integration has been proposed, in particular by introducing a new scoreboard of social and employment indicators.

AGE position: AGE believes that a close monitoring of the implementation of the Lisbon Treaty’s transversal clauses 8, 9 and 10 should be carried out; in particular the EU and national budgets together with fiscal measures must comply with Article 9 and its requirements to guarantee adequate social protection and fight against social exclusion. However, the Commission’s proposal for an enhanced social surveillance through the five indicators (EC communication on social dimension in EMU) seems not enough to ensure a genuine social dimension into macroeconomic reforms. AGE calls on the European Commission and EU Member States to mainstream Europe 2020 Strategy’s social objectives into the European Semester process by introducing common rules and procedures to help assess whether economic reforms deliver also social progress and improve socio-economic cohesion in the EU.

For more information you may read AGE brochure Active Senior Citizens for Europe, p. 33.

2.2  Guarantee adequate income in old age for all as the fundamental goal of any pension model, notably by implementing the EU agenda on pensions, taking the EP resolution on an Agenda for Adequate, Safe and Sustainable Pensions (2012/2234(INI) as a basis

Background: The European Commission issued in 2012 a ‘White Paper: An Agenda for Adequate, Safe and Sustainable Pensions’, outlining necessary measures at European level to support and complement national pension reforms. The White Paper proposes a more holistic approach to pension reforms – a proposal that AGE is supporting – for instance through looking for synergies among all relevant topics, such as: longer working lives; gender equality; the internal market for pensions; mobility of pensions across the EU; the future solvency regime for pension funds to better protect employees’ entitlements or informed decision-making and governance at EU level.

AGE position: AGE believes that EU coordination should cover all pension schemes in an integrated way to support EU Member States’ efforts towards adequate and sustainable pensions. Such holistic approach is also necessary to overcome challenges raised by increasingly blurred boundaries between pension schemes and by the on-going shift from the pay-as-you go to funded schemes. Moreover, AGE calls to monitor within the Europe 2020 Strategy framework Member States’ progress in ensuring adequate pensions i.e. indexation of public statutory pensions to allow older people to keep up with progress in society and to prevent old age poverty as a result of the erosion of their income over time.

AGE has been been calling upon national and European policy makers for many years now to improve gender equality at all ages and address the social impact of the shift from statutory pay-as-you-go to funded schemes and from defined-benefit to defined-contributions pension plans (see separate point on gender equality).

For more information you may read AGE brochure Active Senior Citizens for Europe, p. 33.

2.3  Call on the European Commission to table a Directive on minimum income, including minimum pension, as a tool to fight against poverty among all age groups – this should be equivalent to at least the poverty threshold defined as 60% of the national median equalised disposable income

Background: In its Resolution of 20 October 2010 on the ‘Role of minimum income in combating poverty and promoting an inclusive society in Europe’ the European Parliament stated that a minimum income should be guaranteed in the EU under a framework directive. The agreement of a common EU definition of adequacy and of common methods to establish pension adequacy should inform an EU Framework Directive on Minimum Income and would mark a historic advance in EU cooperation to achieve higher level social standards.

AGE position: AGE calls on the European Commission to table a directive on minimum income, including minimum pension, as a tool to fight against poverty and prevent social exclusion among all age groups – this should be equivalent to at least the poverty threshold defined as 60% of the national median equalised disposable income. The right to minimum income schemes, including minimum pension, should be recognised as a fundamental right to ensure everyone’s dignity and independence i.e. in line with the Article 1 of the European Charter of Fundamental Rights.

For more information you may read AGE brochure Active Senior Citizens for Europe, p. 37.

2.4  Promote reference budgets for an adequate income – based on a basket of goods and services adapted to different age groups’ needs – in order to assess whether poverty threshold allows a decent life and guarantees personal dignity across the life cycle

Background: The EU’s Recommendation on active inclusion published in 2008 outlines the following conditions for the calculation of a minimum income for all: first, the individuals concerned need to participate in the process of defining adequacy, and, secondly, the income level must enable people to participate fully in society and realise their own goals. This recommendation did not refer directly to older people as a separate target group, but rather dealt with the issues of employment, adequacy of minimum income schemes and access to services from the perspective of the economically active population. However, because all the issues above are relevant to older workers and also have direct impact on the situation of pensioners, older people’s organisations and AGE have been following the policy developments within on active inclusion. Moreover, in its Europe 2020 strategy conclusions, the European Council emphasized the need to improve measurement of poverty.

AGE position: AGE supports the definition of a minimum level of income people need to live in dignity as a crucial step in the struggle to combat poverty. Therefore, AGE calls on the development of budget standards for an adequate income in old age based on a basket of goods and services for different old age sub-groups. Such adequacy of old-age income should also be based on a broad consensus among older people and validated by experts on what one needs to live a decent life in old age – this should include non-monetary aspects such as access to quality health and social care, decent housing, leisure and social activities or civic participation.

For more information you may read AGE brochure Active Senior Citizens for Europe, p. 37.

2.5  Transpose EU poverty reduction target  – as set out in the European Platform against Poverty – in all relevant national and EU policy processes

Background: Launched in 2010, the European Platform against Poverty (EAPN) is part of the Europe 2020 strategy for smart, sustainable and inclusive growth. The Platform seeks to play a coordinating role among national social inclusion policies by identifying best practices and promoting mutual learning, setting up EU-wide rules, and making funds available to support fight against poverty and promotion of social cohesion. In the framework of the Platform, EU Member States agreed for the first time ever a common EU target to reduce the number of people living in poverty and social exclusion by 20 million by 2020. National governments have to translate this overall poverty reduction target into their national contexts.

AGE position: AGE believes that the analysis of measures to prevent old-age poverty should not be limited to the capacity of social protection schemes to cover exclusively basic goods or requirements – the aim is rather to take into account the fact that adequacy must apply to a longer period of life as a pensioner i.e. living sometimes more than 40 years. Moreover, EU Member states need to translate the overall EU headline target on poverty reduction at national level and break it down by age and gender in order to focus social inclusion policies on combating old-age poverty among specific sub-groups, such as older women, single older people or those living in rural areas, people from ethnic minorities or older migrants etc. Last but not least, AGE advocates for the use of reliable poverty measures at national and EU levels combining all existing methods and approaches, such as relative income poverty and material deprivation indicators – in order to provide the most accurate picture of the social realities and specific risks faced by all population groups including older people

For more information you may read AGE brochure Active Senior Citizens for Europe, p. 19, 24 and 25, 36

2.6  Mainstream gender equality into all EU policy processes to ensure the same access to adequate social protection in old age for women and men

Background: The majority of older people in all EU Member States are women and the highest poverty rates are concentrated amongst very old women. Both older women and men suffer from inequalities in terms of social protection. However, today most women are still additionally affected by their maternity history, as well as by informal caring responsibilities which restrict their access to good quality employment. On-going pension reforms introduce a closer link between pension income and contributions. This means that if pension benefits and old-age income depend on people’s contributions, while the level of contributions depend on wages and career work paths, most women will continue to get low or very low benefits when retired.

AGE position: AGE work aims to guarantee individual and adequate pension rights for all to ensure a dignified life in old age – including those with justified career breaks, mainly women. When private funded schemes are encouraged or imposed, AGE advocates for compensation in pension schemes for time spent on family caring i.e. contribute on behalf of women caring for children and older dependents. This should be accompanied by measures enforcing gender equality in employment to ensure an adequate retirement income for women – it is through the life-cycle approach that social protection based on equal gender opportunities in earlier life can prevent poverty in old age. Last but not least, for women coming into or already in retirement with inadequate social protection rights as result of gender inequalities in their past work (career breaks, low paid jobs) – other compensation measures are crucial e.g. survivor benefits, pension indexation or adequate minimum income schemes.

For more information you may read AGE brochure Active Senior Citizens for Europe, p. 24, 25

2.7 Support the development and adoption of a European Quality Framework for Long-term Care Services inspired by the WeDO project[1]

Background: The WeDO (Wellbeing and Dignity of Older people) project was an EU-funded Pilot project on preventing elder abuse that run from 2010 to 2012. Coordinated by AGE Platform Europe, it gathered 18 partners from 12 countries. WeDO developed a European Quality framework for long-term care services and an EU-wide partnership of organisations committed to disseminate and promote it. The framework introduces a vision for quality long-term care services in Europe, supported by specific quality principles and areas of action for the quality of services for older people in need of care and assistance. The quality principles are inspired by the Social Protection Committee ‘voluntary quality framework for social services’.

It also contains recommendations for implementation for different target groups and at different levels, with examples of quality development, control and labelling tools; and a methodology which explains how to implement the principles and lists areas of action by developing a participatory approach in a quality improvement process. This methodology is inspired from the World Health Organisation improvement cycle of the Age-friendly Cities Program and is illustrated by examples of initiatives using the participatory method. It provides a list of around 30 good practices from 12 different countries and EU-wide.

The framework is translated in 11 languages, and can be downloaded here.

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