Finance Minister Brian Lenihan says that there will be no reduction in the State Pension this year. He said the increases in the state pension over the last ten years and the security this has brought to older people should be preserved.

Minister Lenihan said that working-age rates of payment will see a cut of 4%. He said the rates have far exceeded the rate of inflation since 1997. The rates will still be ahead of 2007 working age rates of payment.

Jobseekers' allowance and supplementary welfare rates for those aged 22-24 will be cut by €6, while the maximum personal rate of payment for all weekly schemes - apart from pensions - will be cut by €8 a week from the first week in January.

The rate of payment of jobseeker's allowance and supplementary welfare allowance for those aged 18-21 is unchanged.

'The fact is we have built up a generous level of welfare provision over the last decade and though they must now be reduced somewhat, our record commitment to those in need stands up,' the Minister stated.

The Minister said that child benefit will be cut by €10 with an extra €10 for a third child only. He said these reductions would bring rates of payment back to the 2006 rate for the first and second child and to 2005 rates for the fourth and subsequent children. The rate for the third child will bring it back to 2004 levels.

Mr Lenihan said that due to the recent cold snap, an extra €14m is being allocated to the fuel allowance scheme to enable a payment of €40 to households that get the fuel allowance payment.

In an effort to help the unemployed, Mr Lenihan said that an extra 15,000 activation places and supports for the unemployment will be allocated at a cost of €200m.

The skills development and internship programme will provide up to 5,000 places in the private sector with the sector contributing another €38m to pay some of the costs of the internships.

The work placement programme will provide up to 5,000 places in the public service, while a new community work placement scheme will generate up to 5,000 additional places in the community and voluntary sector.

He said the National Employment Action Plan will be refocused to establish clearer pathways to employment by ensuring that state agencies interact early and often with those who have lost their jobs.