Friday 28 October 2016

Budget war over social welfare increases for 400,000 people

Published 09/10/2016 | 02:30

Minister Leo Varadkar Picture: Tom Burke
Minister Leo Varadkar Picture: Tom Burke

The Budget war over increases in social welfare payments will go right down to the wire with Fine Gael and Fianna Fail last night still at odds over when the benefit hikes should be paid.

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Social Protection Minister Leo Varadkar told the Sunday Independent the aim of this week's Budget is to ensure "everyone feels it in their pocket - even if it is modest".

The minister's spokesman later said the Government is united in its view that there should be benefit hikes for a wide group of people - and not just pensioners.

He said the minister would like to increase all payments by €5 a week - as proposed by Fianna Fail for pensioners - but said this will not be possible as it would cost €350m a year.

Mr Varadkar proposed delaying increased welfare payments until June next year to ensure 400,000 people could receive increases in their weekly payments.

But speaking before the Fianna Fail presidential dinner last night, Micheal Martin said he wanted the pension hike to be introduced in January.

However, he did not say this was a red-line issue for the party.

"I think there's an element that Leo feels that if he can have a go off Fianna Fáil consistently, and try to undermine Fianna Fáil, that might gain him traction in whatever subsequent election he might find himself a party to," Mr Martin said.

The Sunday Independent understands both parties are likely to settle on payments being made in April or March.

It has also emerged that there will be no cuts to the prescription charge in Tuesday's Budget. Health Minister Simon Harris is understood to favour using his funding this year to improve services and reduce waiting times for hospital beds. It is likely he will cut prescription charges in future budgets.

The Government is also expected to approve a 10c increase in the minimum wage from €9.15 to €9.25.

Meanwhile, Public Expenditure Minister Paschal Donohoe was in ongoing discussions yesterday afternoon with his Cabinet colleagues in the Independent Alliance.

Relationships between the Alliance and their Fine Gael colleagues were described as "tense" last night.

Junior Minister Sean Canney said the Alliance is still pushing to have a €25m fund for sheep farmers established next year. The scheme would see farmers who have fewer than 100 sheep paid €20 per sheep annually.

They also want a tax-back scheme for people making home improvements extended and Transport Minister Shane Ross also convinced Minister Michael Noonan to close a tax loophole exposed by the Panama Papers scandal.

Sunday Independent

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