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Christmas welfare bonus will not be paid

Wednesday, 11 November 2009 22:05

The Minister for Social and Family Affairs has stated that the Christmas social welfare bonus payment will definitely not be paid this year.

Watch live Dáil proceedings

In the Dáil this afternoon, Mary Hanafin the payment would amount to €223 million this year and said it is money the country does not have.

She said the original decision made last April was not taken lightly and added that unfortunately the money was not there for it to be paid.

Labour's Roisin Shortall said it was a heartless decision, while Sinn Féin's Martin Ferris said it would drive people to money lenders.

Earlier, the Taoiseach, Brian Cowen has told the Dáil that the Government would not change its mind on the issue
Brian Cowen said the supplementary payment would cost €223m this year and €245m in 2010.

He said the decision to abolish the bonus was made in the context of the last Budget and that in the current economic climate it was not possible to pay it.

Mr Cowen was responding to a question from Labour leader Eamon Gilmore, who said that many pensioners had hoped it would be restored.

Brian Cowen told the Dáil that all areas have to be looked at for possible cuts in next month's Budget, including social welfare.

Elsewhere, Department of Finance figures show that the Government is slightly more optimistic about economic growth and employment forecasts for next year.

Pre-Budget estimates show the Department believes the economy will contract by 7.5% this year and by a further 1.5% next year.

Although these figures are grim, they are still better than had been predicted in April when Minister for Finance Brian Lenihan forecast that the economy would contract by 8% this year.

The estimates, which were discussed by Ministers at the weekly Cabinet meeting last night, show that unemployment will rise to around 13.75% in 2010.

According to the estimates, the Budget deficit will reach 12% of Gross Domestic Product, but only if the Government achieves savings of €4bn.

The pre-Budget estimates will be officially published tomorrow, with the Budget to be delivered on 9 December.