Dole to take hit after child benefit rethink

Fear of political fall-out means other social welfare rates in line for major budget cuts

Shane Coleman, Political Editor

Social-welfare recipients will almost certainly see a reduction in weekly pay

SOCIAL welfare recipients are facing cuts in their weekly rates in next month's budget as the government moves away from plans to chop child benefit by 20% as originally envisaged.

Informed government sources also say that a cut of up to 7% in public-sector pay is now "inevitable" despite the threat of strike action and that "extremely rough" cutbacks of €1bn will be made to the health budget.

They say that more modest cuts in the child-benefit budget of around €220m or 9% – targeted more at higher earners – means that it will be practically impossible for the government to avoid cutting all welfare rates, with the exception of the old-age pension, which will not be touched.

No final decision has been made on social welfare but, although child benefit will be reduced, the government is extremely wary of the political fall-out and the negative impact on child poverty. Therefore the cut is likely to be around half the €500m called for in the Report of An Bord Snip Nua. However, there will no avoiding massive cuts in the health budget. Options being considered include:

• A hugely controversial proposal to introduce a flat fee for medical-card holders when they order a prescription.

• Another increase in the €100 charge to visit an accident and emergency ward.

• A further hike in the €100 monthly threshold for the Drugs Payment Scheme beyond which non-medical card holders do not pay for drugs.

While these issues have still not been finalised, cabinet ministers are determined to press ahead with a cut in the public-sector pay bill.

They will take a lead by agreeing to a cut of around 15% in their own salaries. This cut will also be imposed on senior public servants and hospital consultants, who currently earn up to €240,000 from the state. Ways are also being examined to ensure judges too have to take a pay reduction.

The cabinet is said to be determined to face down the public-sector unions and it believes that the teaching unions, in particular, have called the public mood wrong by voting for industrial action.

"They are adamant that this is the time to fix things [regardless of the political fall-out]," one senior source said yesterday.

Ministers have also looked at applying cuts in public-sector pay to retired public-sector workers. However, it is understood that this has run into potential legal difficulties – particularly relating to a proposal to apply a tax rate of 10% on retirement gratuities.

Consideration is also being given to changing social-welfare payments to "incentivise" workers to return to the workplace, amid concerns that in a minority of cases workers with families and a mortgage may be financially better off on the dole.

November 15, 2009

Comments

#1 c carroll commented, on November 15, 2009 at 9:01 p.m.:

People should remember when they find it hard to feed and heat themselves after this budget that they should look no further than paul gogarty and the greens who are supporting this.

#2 Michael McGrath commented, on November 15, 2009 at 9:25 p.m.:

Budget suggestions :

Disability Allowances as well as the Dole to Over-60's should not be touched.

A serious levy of 10 % should be placed on Western Union, PayPal and any others whose sole business here is to send a Billion annually out of the country, to bring in one hundred millions to the Exchequer .

In particular the Rent Allowance must be slashed as flat/apartment/bedsit landlords charge far to much - they must take the hit like the rest of us !
To be reduced by one-third , at least !

Higher civil servants etc to be cut by 20 % , also their pensiions - AS WEll AS THOSE ENJOYING FAT PENSIONS NOW > AND A PENSIONS CEILING OF 60,000 EURO TO BE IMPOSED .

Nama should be withdrawn and the banks temporarily nationalised, for five years, to be put on good footing so they can be sold off too the highest biidders in five years time ..

#3 Johnny commented, on November 16, 2009 at 1:05 p.m.:

"They will take a lead by agreeing to a cut of around 15% in their own salaries"

Oh my, what a sacrfice! How about taking a substantial pay cut, in the region of 30-40%? That would be leading by example. The same goes for senior civil servants, or anyone in the public sector earning over €200K. State cars should also abolished, as well as serious reform & reduction of Dail expenses. No more money ploughed into the sinking ship that is Anglo

#4 brian commented, on November 16, 2009 at 9:41 p.m.:

Noticing all the pale plump little kiddies strutting the town,I doubt if one less chocolate eclair will do em one little bit of harm!

#5 g.mc arder commented, on November 16, 2009 at 10:53 p.m.:

Michael...you'd make a good Minister of Finance for this Government...I tell you. You say leave the Disability Benefit & Old Age Pension's alone but decrease Rent Allowance by 33%. Well I know quite a lot of people on pension's & on disability benefit who are/have to live in private apartment's because the Government of the day, mostly Fianna Fail for the past number of year's made a hames of social housing for those on same. (As on Joe Duffy today, there was a good example of this of a woman evicted like dirt from her home) & why should those with massive salaries be able to pick up bonus payments in the form of "Child Allowance" because that's what they are to anyone on a salary over 80.000. I'd like to see big cuts in “Child Allowance’s) to this variety of citizen.
Now, for those in government & out of it preaching that the cost of living came down I'd ask you to revise that, because every unfortunate person on a medical card will be paying a new tax on same because this government sneakily found/said this after a nasty brainwave, let’s tax the sick & let’s do it on every single item not every prescription. Great thinking Mary, Cowen shouts as he rises from his seat & shouts’s an almighty “Hurrah”! But it’s just not the sick it’s the real chronic sick that need numerous drugs & treatment’s just to stay alive. Now to get back to Tesco’s & Dunne’s I can tell you Tesco/Dunne's & the rest of them have all put up the price of basic foodstuff’s since their great token foray into cheap shopping for to get the people to shop here instead of the North, that was a hoax & a joke. Now after this crazy daylight robbery budget (nothing new there) people will even run again up to the North in bigger numbers to shop & maybe even the guts of 4 billion will go out of our economy into theirs because "Yer Man" wants to play "Scrooge" instead of Santa Claus" this Christmas. All the nearly sick people will be dying because of medical card taxing & all the dying people will die immediately because there won't be a doctor or nurse left who'll work for the reduced money they're going to be getting & developer's will be buying land to set up "Graveyards" for the maximum customer's they'll be getting to buy same, & will be still robbing the public in death as well as getting their "Nama" security pension from the poor sods they're burying. & Mssrs Cowen, Lenihan, Harney, & Gormley, will all jet up to the North for their weekly shop to pick up the bargains & mix it with those they've been preaching for God knows how long not to commit this "Mortaler".

#6 jonathan commented, on November 18, 2009 at 11:50 a.m.:

The dole should be phased out or reduced dramatically. The amount of money currently dished out is ridiculous in comparison to other countries.
There is no incentive for people to get up and make an effort - some people are even better off on the dole than they would be if they where working.
The government should make people do some form of work to earn the dole - another form of being a public servant but where you must get out of bed in order to earn it.

#7 Louise commented, on November 18, 2009 at 7:53 p.m.:

A cut of 15% in salaries of politicians is a net cut of 7.5% allowing for tax and levies they would have paid on that 15% of salary.

No mention of cutting the gravy train of their allowances.

Abolish turning up money. It was cut by 10% recently and is now €55 per day.

Abolish all untaxed unvouched allowances - too many to list.

restrict the number of expenses that can be claimed on a vouched basis - currently Xmas cards, websites, leaflets, 'research' and many other loose categories are allowed.

#8 brian commented, on November 19, 2009 at 1:56 a.m.:

Im getting pretty peeved with Jonathans'idiotic thaterite comments!Capitolism dos'nt work,my friend..hav'nt you heard?

#9 v.gerrard commented, on November 19, 2009 at 11:05 p.m.:

Part 1

Do you know as of this week 14% of householder's in the US were either near foreclosure or majorly behind in paying their mortgages? This was for a ninth quarter in a row & could with the rate of unemployment be the biggest obstacle to the US getting out of recession/depression. Also, Obama said, when he came into power that he would save or create a million jobs in his first year or two of his presidency, not doing one or the other of those two isn't really going to do much to improve the situation. But if it's the former then that will be doing nothing as regards creating anything. & then we hear now or at least I heard from some reliable sources in the US that the figures collected from governments bodies as regards new jobs created from January were a lie in most cases. That the body reporting on these new jobs for Obama's government had made up regions that didn’t/don't exist and they were saying these same concocted region's had oodles of jobs. But not the case, this was a fabrication or a computer glitch they put it down to. So jobs haven't improved that much & in some American state's the job number's have actually fallen sharply. So the US markets have fallen today on this news especially the damaging news on the worsening house fore-closures.

#10 v.gerrard commented, on November 19, 2009 at 11:17 p.m.:

Part 2

I have always believed that the economies of the world will not recover while unemployment keeps static or rises. Banks will not lend to businesses if people have no money or no jobs to buy goods on Main Street. So the vicious circle will continue & the recession/depression will hang on like an eagle’s claw & it will feed on more horror stories of fore-closure & jobs lost or not created. & in conditions like these even China’s future might not be as rich as they expect. Their world of money might just evaporate away likewise as the value of our homes. The government in Ireland have a horrible juggling act to perform; & as much as the hand of God helped Henry to cheat against Ireland we need God in totality to help Ireland win this much bigger world survival game!

PS. Both the wars in Afghanistan & Iraq & the goings on in North Korea, Iran, & the Middle East (especially regards the price of oil) as a whole will even put the world in a more turbulent financial quagmire.

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