Wednesday 20 September 2017

New pressure for cut in dole, pensions in bid to save €440m

Michael Brennan Deputy Political Editor

GOVERNMENT officials considered cutting the old age pension and the weekly dole payment by €1 per week in the run up to last year's Budget.

The cutback, which would have saved €71m, was rejected by the Government which decided to keep its pledge to maintain social welfare rates.

But there will be pressure on the rates again in the forthcoming Budget, with Social Protection Minister Joan Burton required to find €440m in new social welfare cuts.

The newly released paper prepared by the Government's Tax Strategy Group for the last Budget acknowledged the Government commitment not to cut the rates.

But it said that if it becomes necessary to consider some level of reduction in primary rates of payment, such an approach should have regard to the potential impact on poverty rates and the different rates paid to different groups.

It outlined the savings involved in a €1 cut to weekly pension payments to people aged over 66 which would bring in over €24m. And it said a similar €1 per week cut to other social welfare payments such as the dole for people under 66 would bring in a further €41m.

The paper pointed out how people on the dole were being paid far less than those receiving the contributory state pension.

It said there was "a monetary gap" of €42.30 per week between the €188 per week jobseekers' benefit payment and the €230 contributory state pension. It said jobseeker's benefits had once been 89pc of the state pension but was now down to 81pc.

PROTECT

Ms Burton has already signalled that she is going to campaign to protect welfare payments but the paper from the tax strategy group show that the options facing her department are very limited.

However, the group's paper focused on the potential to cut the "replacement rates" – which is the technical term for having social welfare payments that so high that they act as a disincentive for people to take up work.

It said there was a particularly issue with people on social welfare who had a "relatively high number of dependent children" and were also getting their rent paid through rent supplement.

Irish Independent

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