Welfare cuts but weekly rates held

Monday 05 December 2011 17.40
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Government to standardise child benefit
Government to standardise child benefit
Joan Burton says part-time workers on Jobseeker's Benefit face cut
Joan Burton says part-time workers on Jobseeker's Benefit face cut

The Department of Social Protection has outlined details of the €475m of cuts to be made as part of the Budget.

Child benefit will remain at €140 per month for each of the first two children, but the rates for the third and subsequent children will be standardised to €140 per child over the next two years.

That means the rate for the third child will fall to €148 next month and €160 for subsequent children.

Additional monthly payments for twins and triplets will be maintained but grants usually paid at birth, four years and 12 years for multiple births will cease next month.

Payments to carers will be maintained, while older people will receive their free State pension at current levels as well as free travel, television licence, living alone allowance, over-80 allowance and islander allowance.

The fuel allowance season will be reduced by six weeks from 32 weeks to 26 weeks. New participants on Community Employment Schemes will not be able to claim another social welfare payment at the same time.

In relation to the One-Parent Family Payment, the upper age limit of the youngest child for new claimants will be reduced to 12 years in 2012, with further reductions to an eventual seven years on a phased basis.

The Back to School Clothing and Footwear Allowance will fall from €305 to €250 for children aged 12 years or more and from €200 to €150 for children aged over four.

Where a Jobseeker's Benefit recipient is working for part of a week, the payment entitlement will be based on a five-day week rather than a six-day week. Minister Joan Burton later said this would mean a cut of 20% for part-time workers receiving these benefits, with effect from July.

The cut arises from a reduction in the number of days on which the benefit is calculated. Currently, if a person works for three days in any week, he or she will receive half the payment on the basis that the "welfare week" lasts for six days. But from July, the "welfare week" will be reduced to five days, meaning that the individual concerned will lose one day's benefit.

According to a statement from Minister Burton, the reform will provide a greater incentive to part-time workers in receipt of the benefit to return to full-time employment.

Sunday working will be taken into account when calculating the amount of Jobseeker's Benefit or Jobseeker's Allowance to be paid.

There will be a number of changes to concurrent payments, including new participants in CE schemes, who will not be able to claim another social welfare payment at the same time, but will receive the standard additional €20 a week paid to all other participants.

The amount of earnings disregarded for the purposes of the One-Parent Family Payment means test will be reduced from €146.50 to €130.00 a week in 2012 for new and existing recipients with further reductions over the following four years.

There are also changes to the assessment of means from self-employment for those claiming farm assist, with the level being raised from 70% to 85%.

The minimum contribution by single tenants towards rent for the purposes of Rent Supplement scheme will increase from €6 to €30 a week, with the minimum contribution payable by couples rising to €35 a week. The minimum contribution for the purpose of the Mortgage Interest Supplement scheme will increase by €6 to €30 a week for a single person and for couples to €35.

While a person engages with the Mortgage Arrears Resolution Process, payment of Mortgage Interest Supplement will be deferred by 12 months.
The age of disability allowance will rise to 18 years.

Burton signals widening of PRSI base

Minister Joan Burton said the overall estimate of cuts in Social Protection had been €665m, but the Government had decided to limit the cuts to €475m as it was unwilling to implement measures that would have a devastating impact on those affected by the measures.

She said she has tried to look with fresh eyes at the social welfare system and to put the Social Insurance Fund on a sustainable footing. The fund is expected to have a deficit of €1.9 billion this year.

Minister Burton said people who have contributed more will receive a more generous State pension. She said she expected the Minister for Finance tomorrow to say something about widening the PRSI base in order to help plug the hole in the Social Insurance Fund.

Earlier, the Minister for Public Expenditure & Reform, Brendan Howlin, said the Government had a duty to protect the most vulnerable in society and to provide the safety net of social protection in what are very extraordinary times.

But he told the Dáil the current level of social welfare expenditure now in place could not be sustained from the funding base now available.

Minister Howlin confirmed that the weekly rate of social welfare payments would not be reduced and that universal child payment would be protected at a standard rate.

The Minister said the Government will endeavour to make savings from a range of measures to total €475m in the social protection area next year. This is €190m less than set out in the National Recovery Plan.