The Government is proposing reducing the social welfare budget by €2.8 billion over the course of its four year national recovery plan between 2011 and 2014.
The plan does not specify individual cuts to welfare payments but it suggests that a radical reform of the existing child benefit and unemployment system will be announced on budget day.
Cuts of €760 million will be made from the Department of Social Protection budget in 2011 in addition to savings of €100 million achieved through "labour activation" measures aimed at getting people back into employment.
Further savings worth €1.9 billion will be required in the period 2012-2014, which should bring the overall social protection budget to €17.9 billion in 2014.
In 2010 the social protection budget is euro 20.9 billion, which means total expenditure will fall by €3 million on this year.
The savings in social welfare expenditure will be achieved through a crack down on welfare fraud, structural reform and new employment programmes to cut the number of people on the dole.
The crackdown on fraud will be aided by the roll out of a new public services card next year for welfare recipients and increased use of new technology, it says.
The plan says, as necessary, there will be rate reductions in social welfare payments. But it says these cuts will be "ameliorated" if substantial progress is made with structural reforms and labour activation measures.
It flags significant structural reforms under consideration by the Government: a major revamp of the child benefit system and the development of a single social assistance payment to replace the different means-tested working age payments that currently exist.
"The development of a single working-age means tested system will help to minimise existing benefit traps and address the lack of incentive to move back to work or move from part-time to full-time employment," says the plan.
On child benefit it says structural reform could include the development of a rebalanced and integrated child income support system. This would provide a universal component to replace child benefit with one single payment rate per child. This universal payment would be supplemented by a further payment in the case of children of families who are in receipt of a social welfare payment or working in low income jobs.
"These supplements would replace qualified child payments and family income supplement as appropriate," it states.