ALMOST 400,000 pensioners will have to pay between €156 and €233 extra each year for their phone this year due to a drastic Budget cut.
Eircom, which provides phone services for the majority of pensioners, has sent letters to its elderly customers in the wake of a government decision to slash the state telephone subsidy.
It warned 270,000 over-66s they face having to pay between €195 and €233 extra per year from February, depending what package they are on with the company.
But 125,000 pensioners who receive their phone services from other providers are also facing extra bills of at least €156 in 2013.
As part of Budget cutbacks, pensioners availing of the scheme will see their government subsidy drop from €22.58 to €9.50 a month.
Eircom customers who are over 66 will also lose a top-up from the company to the subsidy that brought it to up to €28.09 a month – and stand to lose €233 a year.
Eircom gave all customers who received the €22.58 telephone allowance an extra €3.20 towards line rental.
These customers stand to lose €195.36 a year.
But others also got a subsidy of €1.52 if they made outbound calls and a contribution of 79c if they rented their handset.
This brought the full value of the benefit to customers entitled to all the top-up payments to €28.09 a month.
Eircom estimates around 163,000 of its customers are entitled to all of these benefits, with a further 107,000 enjoying the basic state subsidy and some of the top-ups.
In its letter yesterday, Eircom told customers they will get a reduced monthly allowance of €9.50 towards their bill from next month.
"There is no need for you to take any action as this change will automatically be applied to your account from your bill after February 1," said director of sales and service Steve Stewart.
"However, you may withdraw from any existing contract without penalty within one month of the date of this letter."
An Eircom spokesman said the firm decided to stop its top-ups due to the Budget cut and was instead trying to come up with a new low-price package for "vulnerable customers".
"We are working with the regulator to come up with an affordably priced package," he said.
A Department of Social Protection spokeswoman said 395,000 people aged over 66 get the telephone allowance, which has been in existence since 1978.
"Furthermore, state pension rates were not reduced in the Budget as the minister protected core welfare payments such as pensions, disability and carer's allowance," she said.
The telephone allowance, which is a contribution towards line rental and call costs, is normally deducted from the customers' bills each month.