News John Drennan

Tuesday 16 September 2014

John Drennan: 'Welfare lags' to be targeted in the next Budget

Major reforms planned as Burton says dole will be available for a 'far more limited time'

Published 04/09/2011 | 05:00

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SOCIAL welfare as a "lifestyle choice" is unlikely to survive past the next Budget, when major reforms will end the practice of 'welfare lags' collecting full dole payments for decades.

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Social Protection Minister Joan Burton has signalled her intention to engage in major reforms of the system to protect basic welfare rates as the department's budget now devours 60 per cent of all taxes raised in the State.

Speaking to the Sunday Independent last week, Fine Gael TD John Deasy claimed that large numbers of TDs and ministers believe that the promise by Eamon Gilmore and Enda Kenny that there would be no cuts in social welfare rates or any increases in tax rates has "gone by the wayside''.

According to Mr Deasy, "privately, a majority of the cabinet members accept the reality facing them'' that the present rates of social welfare are unsustainable.

Pressure in the Department of Social Protection will also be increased by the revelation that unemployment will significantly overshoot the Department of Finance estimates for the year.

Last year it was estimated that unemployment figures would over the year average out at 405,000. Instead the more likely figure is closer to 450,000, which, when all benefits are included, could create a fiscal black hole of up to €500m.

Ms Burton has flatly ruled out the possibility of cuts in basic social welfare rates and noted: "I heard very clearly what the Taoiseach and the Tanaiste had to say on that matter."

It is believed that Brendan Howlin plans to cut the current €20bn Social Protection budget by €3bn by 2014. Ms Burton, however, noted that the savings of €345m in social welfare fraud for the first seven months of this year alone shows that fraud control can "yield ongoing substantial savings and have a real deterrent effect".

So far this year, the Department's re-energised anti-fraud strategy has saved €101m in lone parents' allowances, €84m in pension payments, €49m in illness benefit and €46.5m in jobseekers' allowances.

Speaking to the Sunday Independent, the minister admitted that with more than half the State's revenue going on welfare "there has to be a balance between spending and tax revenues'' and "clearly social welfare requires a very significant amount of reform".

In what will come as chilling news to those who view welfare as a 'lifestyle' choice, Ms Burton cited the Danish model where welfare rates are similar to here but "are provided for a sharper shorter period" with "actually a real drop in benefits" if you remain on the register beyond a certain period. Ms Burton said in contrast in Ireland "people go on social welfare for longer periods than most other countries" and noted that "under the new model welfare state I am planning the full range of social welfare support will be available for a far more limited time".

Significantly Ms Burton also noted that the Troika's top priority in welfare is not so much the rates as "reform by activation'', where people leave the welfare system as swiftly as possible.

Ms Burton also revealed that she was looking "very closely at the disability bill".

She noted that "there is an assumption that if you go on disability you are on it for the rest of your life but it may actually be good for those who are on disability to return to work in some form''.

Another area under close examination is the €500m a year going on rent supplements to landlords.

Sunday Independent

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