Social welfare €1bn over budget

SOCIAL Welfare spending this year has gone about €1 billion above what the Government had estimated for 2008, driven by a huge rise in unemployment.

Spending for this year was planned on the basis that 170,000 people would be on the live register. But this figure stood at 268,586 at the end of November and the average for the year to date has been 221,200.

A total spend of €16.9bn was planned for 2008, but Social and Family Affairs Minister Mary Hanafin said yesterday: “It is now estimated that social welfare expenditure will outturn this year at €17.8bn an increase of nearly €920m or 5.4%.”

The Government has already planned for a 70% increase in spending on unemployment benefit, or the Jobseekers’ Allowance, in 2009 bringing it to €1.7bn.

In 2008, the spend on Jobseekers’ Allowance went €183m over budget, bringing it to €1.3bn. The number of troubled homeowners receiving the Government’s Mortgage Interest Supplement has more than doubled to 6,700 this year, costing the State €12m more.

There has also been a big increase in families seeking the back-to-school clothing and footwear allowance, from 194,500 last year to 207,080 in 2008. A rise in demand from primary and secondary pupils has pushed Government spending on the scheme €3m above the €46m it had earmarked.

The department spent an additional €20m on the Disability Allowance to cater for an increase in average numbers for the year, from 91,300 to 93,000.

The cost of the so-called “free-schemes” such as bus passes, fuel allowances and electricity allowances has soared €38m above the €279m allowed in the budget. The increase of €2m in the electricity allowance was caused by price increases.

An overspend of €6m on free travel passes was the result of an increase in bus fares. The fuel allowance spend has gone over budget by €18m, mainly because of the increase in unemployed people who are entitled to claim it and a rise in the numbers claiming Disability Allowance. A decision to pay 100% Christmas bonuses to social welfare recipients, rather than the 70% of their monthly allowances, cost the Government an extra €28m.

“We all recognise that there are significant pressures for families and individuals around Christmas time and this funding will go some way towards meeting their needs,” Ms Hanafin said in an Oireachtas committee on social and family affairs yesterday.