Disagreement in Government has emerged over whether Social Protection Minister Leo Varadkar will get a bailout for his department to pay for the Christmas bonus for welfare recipients and pensioners.

Sources close to the Social Protection Minister have confirmed that a supplementary budget this year will to be needed to fund the Christmas bonus.

But the Department of Public Expenditure has instead suggested that the Christmas bonus could be provided through savings.

Mr Varadkar said earlier this year that he would seek approval to pay the bonus, equivalent to an extra week’s payment for pensioners or welfare recipients.

Some €10.9bn is allocated for welfare spending this year. This does not include the Christmas bonus. The cost of the bonus last year, done through a supplementary estimate, came to €200m.

Leo Varadkar
Leo Varadkar

A Department of Public Expenditure spokesperson said: “All Government expenditure for 2016, and beyond, will be facilitated in the context of meeting our EU obligations”.

She added that “end of year savings could be used to as a source of funding” for measures such as the Christmas bonus.

Taoiseach Enda Kenny told the Dáil yesterday no decision was made yet on the bonus. But he also said that “it is not possible to have any further supplementary.”

Labour leader Brendan Howlin noted that Public Expenditure Minister Paschal Donohoe told an Oireachtas committee last week there would be no supplementary spends this year.

Mr Howlin then queried if it would be paid and said welfare recipients needed to know.

Sources close to Mr Varadkar insist that a supplementary budget is needed to cover the bonus payment.

A spokesman said a “mechanism” for the bonus would be decided with Minister Donohoe.

Any decision to wrap the Christmas bonus cost into Mr Varadkar’s budget spend could affect pension increases or supports for the self employed being funded.

Separately, Finance Minister Michael Noonan will meet his Fianna Fáil counterpart Michael McGrath today to go through tax measures in the budget. It is understood Fianna Fáil are in broad agreement with tax changes including USC.

Michael Noonan
Michael Noonan

However, discussions are expected to be more difficult between Mr Donohoe and Fianna Fáil’s Dara Calleary as major issues around education, health and social welfare payments will have to be hammered out.

Taoiseach Enda Kenny yesterday slapped down his jobs minister Mary Mitchell O’Connor over her idea for a special 30% tax rate in the budget for returning emigrants.

The Irish Examiner has also learnt that government advisors were specifically warned at a weekly Monday meeting about what they leak to journalists, after the tax plan was reported.

The proposal, to lure highly skilled emigrants home, would involve a 30% tax rate aimed at those earning in excess of €75,000.

Describing the idea as “bananas”, Fianna Fáil leader Micheál Martin told Mr Kenny in the Dail that the plan meant workers who remained here in the crash would still pay 50% tax.

Children’s Minister Katherine Zappone also moved to dismiss reports that she is at odds with Fine Gael over childcare proposals.

“I don’t know where these phantom sources are coming from.But it does not reflect at all what’s going on,” she said.

“The negotiations have been amicable, firm. I think both of us sharing our own commitment to do something significant in relation to childcare, early years learning and so it’s ongoing.”


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