Social welfare: Payments will be cut back to 2007 levels in coming year
SOCIAL welfare payments are set to fall to 2007 levels next year as the Government signalled cuts of around 4pc in spending.
There will also be a radical overhaul of the child benefit system aimed at introducing a universal payment per child, along with an additional top-up payment for families on low incomes. Plans for this new system will not be completed until next year.
The Department of Social Protection has to shave €860m off its spending in 2011 alone. The bulk of this is set to come from cuts to payment rates.
Some €100m of the total will come from a new labour activation scheme, which is to be announced at the Budget and is aimed at getting welfare recipients back to work.
Social Protection Minister Eamon O Cuiv said that given the scale of the overall cuts, there had to be reductions in social welfare rates.
Although he categorically refused to specify the amount until Budget day, he said that it would not be a return to the "bad old days" as he wished to "sustain people in reasonable comfort".
He added: "We are talking about working-age rates on the kind of 2007 level. There has been very little inflation since.
"Obviously it is a step back but it is not a step anywhere near where we were seven or eight years ago."
Mr O Cuiv said child benefit payments had grown by 330pc and unemployment and pension rates by 140pc since 1997. Inflation over the same period had been 40pc.
The department will have to make further savings worth €1.9bn between 2012 and 2014 to bring spending down to €17.9bn. This represents total cutbacks of €3bn over the four-year plan.
Mr O Cuiv said he aimed to reduce the level of cuts required from 2012 onwards through major reforms that would save large sums.
As well as the new child benefit system, this would include measures to end welfare traps and encourage more people back into work.
Reductions in the numbers on the live register would also provide savings.
His department published three reports yesterday, detailing structural reforms that are being considered. These include a single working-age payment to replace unemployment allowance, lone parent's allowance and other schemes.
The minister also said there would be a major clampdown on fraud through improved technology, such as the new public services card. He believed that these could achieve savings of €100m to €200m.
However, the lone-parent group OPEN slated the proposed reforms, as well as what it said was the lack of clarity on cuts to social welfare.
The organisation's chief executive, Frances Byrne, said: "Forcing Ireland's poorest families to wait two weeks to get the details of what they will face from 2011 is unnecessary.
"It disregards the huge level of anxiety there is in families and communities who are awaiting with fear what lies ahead for them."