Jobless supports to be cut heavily

UNEMPLOYMENT supports are to be heavily cut in a Social and Family Affairs spending package which falls below the rate of inflation.

While changes to welfare payments have not been included and will not be known until they are announced in next month's budget, the indications from yesterday's estimates are that increases will be modest.

In the meantime, cuts are being made by changing the eligibility criteria and rules for participation in a number of schemes, including the Back to Work and Back to Education allowances.

The budget for the Back to Work Allowance has been reduced by 31%. However it is expected the allowance will remain in its current form financially, in that it will continue to provide four years’ financial support for people returning to the workplace.

Tighter restrictions on eligibility will limit the categories of welfare recipients who can take part, however. Details of how the restrictions will apply are to be announced shortly.

The Back to Education Allowance which encourages the unemployed, disabled, single parents and recipients in 10 other welfare categories to attend full-time education without losing their benefits, is to cease during summer holidays, meaning participants will have to find work for three months of the year to survive.

Rent allowance recipients will have to make a bigger contribution to their rent as the minimum contribution is to return to its 1994 level of 10% of the minimum social welfare payment. This means a rise from roughly €7.60 to €12 per week.

The fund for Family Income Supplement has been reduced by almost a fifth (18%) which, Minister Mary Coughlan said, was due to fewer families applying for the scheme.

Other reductions include a 3% cut in the spend on non-contributory old age pension and a 4% reduction on the pre-retirement allowance. But similarly the Minister said this was due to an expected drop in the numbers taking up the schemes.

The Money Advice and Budgeting Service (MABS) will see their budgets cut by 8%. The Minister said this was achievable without impact on the level of services as a MABS office was now in every county and no further expansion was necessary.

On the administrative side, spending on the Oasis project - the website database of information on welfare entitlements and legal rights - has been cut as part of a 21% reduction in the budget for information technology.

The Minister said this was because running costs were lower than the initial set-up costs and there would be no reduction in the level of service.

The main areas of increased expenditure include Child Benefit (up 7%) but this is because increases in the last two budgets are only coming into effect for a full year for the first time in 2003. Increases are also planned in spending on the old age contributory, retirement, widow's and widower's pensions but this is due to the aging profile of the population and an increase in the number of people qualifying for PRSI-based pensions.

In total, expenditure, not including any Budget Day welfare increases, is set at €9.7 billion or 27% of the Government's total spend for 2003.

This compares with €9.2 million last year and just over €5 billion in 1997.