OAPs facing €5 travel charge and electricity cutbacks
CIVIL servants are looking at charging old-age pensioners for free travel and cutting back on their electricity allowances, the Irish Independent has learned.
The proposals are being examined ahead of the Budget, which ministers have acknowledged is going to be savage.
It would mean pensioners would be asked to pay €5 for long rail and bus journeys.
High earners would also be hit, with anyone earning more than €200,000 set to be penalised.
But social welfare is seen as the area where most of the cuts will have to come.
It is not yet known if rent allowance for social-welfare recipients will be targeted.
The Government faces a potentially massive backlash if it goes ahead with the proposed cuts to allowances for the elderly. These include the free TV licence, electricity, gas and telephone allowances and the free travel pass -- all costing a combined €450m a year. Under changes to the free-travel scheme that are now being considered, pensioners would be asked to pay towards the cost of their travel -- possibly a €5 contribution for a train fare.
"It would be subsidised, rather than free," a government source said.
Ministers believe that old-age pensioners would not object to making some contribution towards the cost of their travel.
However, cuts to the free TV licence and subsidised electricity and gas would be highly contentious.
The additional entitlements for pensioners – known as the Household Benefits Package – are under the spotlight as Social Protection Minister Joan Burton seeks to find cuts.
“It would be a surprise if the Department of Social Protection was not looking at all these schemes,” another source said. Aside from opposition from elderly people, there will also be concerns expressed by the companies that benefit from the funds. CIE, ESB, RTE and Eircom are among the companies that would be affected if there were cuts to the benefits.
Cuts to the package were also looked at last year when the department drew up a menu of potential measures. Around 400,000 people get the current package of benefits. The schemes cost almost €370m last year.
The package of benefits is available for all those aged 70 or over, regardless of their income. The benefits are also given to: people in receipt of the Carer’s Allowance, who live with the person being cared for; pensioners aged between 66-70, generally living alone and getting a social welfare payment; and people aged under 66 who are receiving a disability or a caring-related payment.
The Household Benefits Package is made up of:
- The electricity or gas allowance. - Telephone allowance. - Free TV licence.
The Free Travel Scheme is a separate entitlement available to over 1.1 million people – pensioners, people with disabilities, carers and their families.
Currently, there are 720,000 elderly and disabled people eligible for free travel. But when passes for spouses and companions are added in, this rises to over 1.1 million.
A review group – made up of officials from the departments of Social Protection, Transport, Public Expenditure and Reform and the National Transport Authority – is currently examining the scheme.
The cost of the Free Travel Scheme has risen from €46m in 2001 to €75m in 2011.
But the sums paid to transport companies have been frozen for the past two years. The review is to examine and report on the current operation and future development of the Free Travel Scheme.
The department says no decisions have yet been made about the scheme and that it appreciated the important role of free travel in preventing the isolation of elderly people. Any cuts would have a direct impact on the companies who get direct or indirect payments from the Department of Social Protection.
“You can bet the impact would be raised with ministers,” a source said.
Under the electricity and gas allowance, customers get 1,800 units. ESB customers with Electric Ireland receive an allocation of 150 units a month on their bills, with direct payment made by the department to Electric Ireland under the standard rate. Customers who use other suppliers, such as Airtricity or Bord Gais, or who use gas, receive a cash payment of €39.40 a month.
The telephone allowance is €22.22 a month. Eircom customers have this paid directly on their bills and under a special deal negotiated with the telephone company they get €26.86 off their bill each month.
Anybody else, including those who use mobile phones, gets €22.22 in cash. The free television licence is worth €160 a year.