Families begin to feel pinch as swingeing taxes come into force
Published 01/01/2011 | 05:00
Hundreds of thousands of people will begin to feel the pinch of the Budget's higher taxes and swingeing cutbacks from today.
Among the more pronounced will be the cuts to child benefit payments as the measures of Budget 2011 come into effect.
Other social welfare cutbacks such as the €8 weekly reduction in jobseeker's benefit and carer's benefit also come into force today.
The Department of Finance last night clarified the impact of the 10pc pay cut on new public servants in a document sent to civil servants.
It said those joining at entry-level positions would be subjected to the pay cut. This means public servants who are promoted to new positions or move to other jobs in their profession will not be affected.
"The reduced rates of pay and allowances will not apply to persons serving as civil servants on or before December 31, 2010, or to persons who have been made a written offer of appointment from the appropriate authority," the Department of Finance said.
It means there will be two salary scales operating in the public service -- the 10pc lower rate for public servants who join from today onwards and the existing rates for all those currently employed.
A department spokesman confirmed these arrangements were likely to apply to all public servants, not just civil servants. And TDs who are either newly elected or re-elected to the Dail at the next General Election will not suffer a 10pc pay cut either.
The Budget changes coming into effect mean families with young children will be €3,000 worse off by the end of the year.
The changes in income tax alone will suck almost €1,250 out of the pockets of a household on the average family income of €55,000.
If the family has three children who still get child benefit, the hit will come to €480 a year from the reductions in this benefit.
From today, tax relief for trade union subscriptions will be abolished, and so will tax relief on subscriptions to professional bodies, which will affect hospital consultants and accountants.
There will also be higher charges for private and semi-private beds in public hospitals, which is expected to drive up the cost of private health insurance.
Fine Gael Wexford TD Michael D'Arcy said that with so much Budget pain arriving, there should be a referendum on abolishing the Seanad at the same time as the General Election.
"I don't believe we can reform any portion of the public service before we reform ourselves first," he said.
Fine Gael has committed to holding a referendum on the future of the Seanad, which costs an estimated €25m per year to run, if it gets into government. But doing so alongside the General Election would require the agreement of the Government.