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Wednesday 7 December 2016

Year-on-year dole hikes - as Varadkar wants payments 'linked to inflation'

Published 22/07/2016 | 02:30

Social Protection Minister Leo Varadkar relaxing in the sunshine at the MacGill Summer School in Glenties Photo: North West Newspix
Social Protection Minister Leo Varadkar relaxing in the sunshine at the MacGill Summer School in Glenties Photo: North West Newspix

Modest year-on-year increases in dole payments and the State pension are on the cards after Social Protection Minister Leo Varadkar announced plans to link welfare rates to inflation.

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The move, which took some of Mr Varadkar's Cabinet colleagues by surprise, is set to cost in the region of €250m per year.

Under Mr Varadkar's plan, a legal mechanism would be put in place whereby welfare rates increase in line with inflation or average earnings.

In practical terms, it would result in an increase of around €3 per week for the average person on the dole.

But Mr Varadkar told the MacGill Summer School that he was not inclined to increase child benefit by €5 - and instead would prefer that €60m be used to lift the burden of back-to-school costs.

The Dublin West TD also wants the index-linked mechanism to apply to other payments such as the carer's benefit and disability allowance.

"It is obviously not something that is going to be in the Budget in a few weeks' time, but it is something that I would like to legislate for next year and I'll be seeking cross-party support," Mr Varadkar told reporters.

"Like all these things, it can go up or down, though it rarely happens, every once in a generation where you have deflation and average incomes go down.

"But I think it's reasonable to conclude that [the] economy is recovering and over the next few years we will have a return to pay increases and inflation and I don't want pensioners, carers or people with disabilities to fall behind."

Mr Varadkar said it was not an issue that the measure was not contained in the Programme for Government.

And he dismissed suggestions that the move was to do with his leadership ambitions. "Just because something isn't in the Programme for Government doesn't mean we can't do it. It is not that it is rejected in the talks. No doubt anything I do or say is linked to leadership. If we make this change, it will be there for decades, I hope. It will be a big change for the better."

Fine Gael sources yesterday said they were surprised by the move, given the measure was not discussed in the Programme for Government negotiations. But Mr Varadkar was handed a boost last night after both Fianna Fáil and Sinn Féin welcomed the proposals. "Fianna Fáil has long called for new mechanisms to be put in place to safeguard people's living standards into the future. The Government now appears to be examining such proposals," said Fianna Fáil's social protection spokesman Willie O'Dea.

"However, we should not forget that many people are still suffering the effects of the previous five regressive budgets.

"These people have felt no benefit from the economic recovery. The upcoming Budget offers an opportunity to address this."

Sinn Féin's social protection spokesman John Brady added: "Every person in receipt of social welfare should receive a payment that provides them with a basic standard of living. The minister's proposals are just one step in the right direction."

Meanwhile, Mr Varadkar has said he believes a Border poll would be "divisive" and "unsuccessful".

Mr Varadkar said such a referendum could "undermine relations" with unionist parties in particular. But he says he does believe he will see a united Ireland in his lifetime.

"I would like to see a united Ireland and I do believe there will be a united Ireland in my lifetime, although I don't know at what point in my lifetime," Mr Varadkar said.

"However, I don't feel a Border poll would be a good idea at this time. I think it would be unsuccessful and divisive and could undermine relations between the two communities there. We need to achieve a unity of purpose before that time."

Irish Independent

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