“A world-record in cuts” – the wages of pensioners discussed during a meeting of the delegate council of Efling

The wages of pensioners were covered during a meeting of the delegate council with many attendees yesterday, April 8th. Special guests at the meeting were Efling members aged 55 or over.During the meeting, Stefán Ólafsson, expert at Efling, presented an unpublished report regarding the wages of pensioners. Stefán has been working on an extensive study of the pension system for some time. His presentation particularly addressed the interplay of national insurance and pension funds in shaping the wages of pensioners and the disabled and how the excessive cuts lead to the low-wage problems of pensioners. He argued that both the income threshold and the pension limit were far too low. The amount spent on old age pensions by the Icelandic government is, in fact, among the smallest among the developed western states. With regards to the welfare system as such, it’s clear that Iceland is among the OECD countries whose expenditures to welfare matters are the lowest. In that respect, Iceland is far behind the other Nordic countries.Despite the small pension expenditures of the state, the development has been, paradoxically, that the tax-burden on pensioners has grossly increased since 1990. Most OECD states provide pensioners with special tax-breaks but Iceland has nothing of the kind. However, capital owners, who live on capital gains, receive huge tax-breaks, as the capital gains of wealthy people are taxed at a rate of 22% while the highest incomes of workers and pensioners are taxed at a rate of 47%. The groups most effected by the cuts in the budget of national insurance are low-wage earners, women, the disabled and immigrants.In discussion groups et the end of Stefán’s talk, the members of Efling expressed their displeasure with how cuts take place within the Icelandic pension system and covered possible improvements and how the labor movement can move forward in the struggle against this great injustice.The talk of Stefán Ólafsson may be viewed in its entirety here