retirement pensions
£280m of EUcash pays early
retirement pensions
THE agricultural workforce in Ireland is undergoing a major restructuring with over 8500 farmers registered on an early retirement scheme and up to 50,000 producers now farming on a part-time basis.
The retirement scheme began in 1994 with an expected maximum of 7000 farmers taking up the option.
But Irish Farmers Association rural development committee chairman Dermot Leavy said the agricultural depression provided an added incentive for producers to opt out and the predicted maximum has been exceeded.
To date £280m of EU cash – 28% of the EUs retirement fund budget – has been used to pay for farmers to retire.
To qualify for the scheme, farmers must be between 55 and 66-years-old and have been engaged in farming for the previous 10 years, earning over 50% of their income from farming and spending at least 50% of their time on the farm, said Mr Leavy.
The farmed area must be at least 5ha (12.5 acres) and the amount of pension payable is £4006 plus £250/ha (£101/acre) up to a maximum of 24ha (60 acres) and about £10,000. But negotiations are underway to increase this to £12,700.
The pension is then paid for up to 15 years but ceases when farmers reach 70.
The amount of land transferred to a recipient farmer, must be at least 5ha (12.5 acres) and the recipient has to be between 18 and 50-years-old, must be a practising farmer and has to remain farming for the duration of the pension period.
Mr Leavy said: "The average age of retiring farmers is 61 and the recipients 31. Many of the retiring farmers hand land over to their sons or daughters and remain in the farmhouse.
"But regular inspections are carried out to ensure the retained land is not farmed. These inspections are strict and some farmers have been caught out. Even allowing sheep to run through the retained land can result in pensions being suspended," said Mr Leavy.
He warned: "Retired producers are also not allowed to carry out farm contracting work and many who have switched to part-time farming, supplemented by contract work in recent years, have to consider the economics of losing both incomes before retiring.
In addition, the growing number of part-time farmers who have tapped into Irelands booming economy and taken work in the building industry, may now find they are ineligible for a pension.
pension.
"As well as the financial implications, retiring farmers have to consider the psychological impact of retiring. Some are more than happy to go out and play golf, others find leaving agriculture hard to come to terms with and there is a strong demand for the IFA to set up a retirement club to keep people in touch."