People who continue to work past retirement age should continue to pay national insurance, according to the leader of the Liberal Vannin Party.
The proposed change is one of several motions Lawrie Hooper will seek to gain support for in Tynwald this month.
Currently every working people over the age of 16 and under state pension age (currently 66) pays National Insurance.
However, Mr Hooper said this policy has its disadvantages and not just for the public purse, with the most recent public consultation in 2015 showing more people supported a change than outright rejected it.
He told Manx.News: “Ultimately, it’s a it’s about fairness, because if anyone is in work, they should be required to pay national insurance, but they should also be able to benefit from that.”
Lump Sum
Mr Hooper said that part of the problem is where people who haven’t worked enough years to qualify for a full pension reach retirement age, but then can’t afford to pay a lump sum to top up those years.
He said: “Why can’t people say, ,you know what, I’ll just work a couple more years and then I’ll secure my full pension.
“It doesn’t seem unreasonable, actually, as an option and I think that’s the problem when you don’t charge this, and you have a policy that says, no, we’re going to have an arbitrary age cap on this.
“I don’t understand why we tell people, no, I’m sorry, you’re a pensioner, you’re no longer eligible for these benefits.”
The Ramsey MHK said that while the argument has been put forward that the state pension is a benefit, something which he believes is the wrong approach to take.
He added: “Ultimately, it’s about fairness.
“It might raise a little bit of money for the government, to the National Insurance Fund, I don’t think we’re talking about big millions here, but ultimately, I think there are people who are disadvantaged by the current age cap, and I don’t think that’s fair, really, anyone.”
Businesses
One of the potential pitfalls is that while workers would be paying the NI, businesses would also be required to, which could potentially putting them off hiring people aged 66 or over.
However, Mr Hooper said he believes that with businesses struggling to fill roles across the island, this wouldn’t deter many potential employers.
He said: “As a business, you would be pretty daft to say, well, I’m not going to hire you, because actually the cost of hiring a 65 year old, 67 year old would then just be the same as hiring a 55 year old or 57 year old, so that wouldn’t change their math at all because if I have to, if I decide I can’t afford to pay this, I’m going to let somebody go.
“Well, you’re going to replace them with someone who’s going to cost just as much money, so I don’t think there’s a real risk of that happening.
“Ultimately, I think businesses paying their employer contributions is happening anyway, and I don’t think there’s any particular issue with saying these small number of people who are being disadvantaged, I think, by the current setup, I don’t think they’ll have a significant impact.
“But ultimately, I’d like to see if the Treasury have a piece of work on that.”
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