Child benefit lead target of €1bn cuts in welfare budget

CHILD benefit cuts are to head a €1 billion-plus slashing of the welfare budget, Social and Family Affairs Minister Mary Hanafin has signalled.

Ms Hanafin said the McCarthy report had recommended “very severe cuts” as she pledged to try and protect the most vulnerable.

Ms Hanafin indicated the €1.84bn in cuts outlined by the government-commissioned study would not go ahead in full, but it was “impossible” to make a real impact in spending without targeting those on benefits.

She called the €21bn social welfare bill a “huge drain” on public finances as she singled out child benefit for attention.

Ms Hanafin said universal child benefit was “closely guarded” by mothers but said she had not made up her mind whether it should now be means tested, cut or taxed. “What I am trying to do is make out the system that is fairest to all. It cannot stay at the amount it is at, it has almost tripled over the last few years,” she said.

Ms Hanafin said the decision could not be made ahead of the release of the report by the Commission on Taxation.

“I want to see, as a package, how are all of these measures going to impact on families,” she said.

However, she did indicate the €200 a month payment for a third or subsequent child could be reduced to the €166 payment for the first two offspring.

“There will undoubtedly be changes in child-benefit. There will be cuts in social welfare rates and changes in child benefit in the next budget.

“Between now and September, we have to work out what savings can be made, while protecting people who are dependent on social welfare and are very vulnerable,” she said.

The minister hinted she would not be in favour of the across the board 5% cut in all welfare payments called for by the McCarthy report, noting that this type of measure would hit the elderly particularly hard with a pensioner losing €11.50 per week.

“I’m going to fight to protect the vulnerable as much as possible, but I do accept that you cannot avoid cutting the social welfare budget if you are going to get the type of savings that are needed,” she told RTÉ.

With the Live Register heading towards 600,000 according to economic experts, any attempt to prune back the welfare budget will be fraught with danger for the Government after mass street protests forced several key U-turns after the October budget.

The McCarthy report stated welfare bills had soared from €17.62bn last year to a projected €21.27bn in 2009 due to the steepness of the economic slump.