SOCIAL WELFARE:WHILE THE Government has gone to great lengths to stress that there have been no cuts to the basic social welfare payments, the reality is many people who rely on the welfare system will be significantly worse off in the new year.
Child benefit was one of the most high-profile targets this time. While the basic rate of €140 remains unchanged for the first two eligible children, for third and subsequent children it is to be cut from as much as €177 to a flat rate of €140 a month over the next two years.
This will see a family with four children worse off to the tune of €768 a year. The cuts will be staggered and next year the monthly rate for the third child will be €148 and for the fourth and each subsequent child will be €160 before it falls to the flat rate in 2013.
On Monday, Minister for Public Expenditure Brendan Howlin said the standardisation of the rates of payments of child benefit would save €47 million next year and more than €70 million a year when it is fully implemented. However, critics – including the director of advocacy at Barnardos Norah Gibbons – have warned that “the poorest families will be hurt hardest by this cut”.
The grant of €635 which is paid at birth on all multiple births and an additional grant of €635 paid when the children are four and 12 has been discontinued. The back-to-school allowance for two- and three-year-olds has been abolished while the rates for primary school and secondary school children will fall from €200 and €305 to €150 and €250 respectively.
The single biggest cut in benefit is likely to impact new claimants of disability allowance aged between 18 and 21. This group will see their entitlement drop from €188 per week to €100 and their benefit “aligned” with jobseeker’s allowance. New claimants of the allowance who are aged between 22 and 24 will have their allowance capped at a weekly rate of €144.
One of the most controversial cuts sees the period people can claim a fuel allowance reduced by six weeks from 32 weeks to 26 in a move which will cost those in receipt of the payment in the region of €100 per year.
The one-parent family payment has also been restricted. In future it will only be available to people with children aged 7 and under and the amount of earnings which are disregarded in respect of this scheme will fall from €146.50 to €130.
A change in the jobseeker’s benefit from six days to five will see entitlements fall for those in part-time work. At present a person gets one-sixth of the benefit for each day they do not work but under the changes they will get one fifth of the benefit rate. The daily amount will be higher but for fewer days. A person working a three-day week will get two-fifths of the allowance which will work out at about €75 compared with half which is €96. Critics say the move will act as a disincentive for people to take on part-time work.
Another social welfare cut will see the minimum contribution to rent allowance or the Mortgage Interest Supplement that will be required of claimants climb by €6 a week for an individual and €12 for a couple.
The rebate paid by the State to employers to cover statutory lump sum redundancy payments has been reduced from 60 per cent to just 15 per cent.
