Social Welfare payments face cuts of 5%

ALL social welfare payments should be slashed by 5% as part of swingeing cuts aimed at saving €1.8 billion across social and family affairs payments.

An Bord Snip Nua has recommended a 5% reduction in social welfare rates would achieve savings of €850m. The dramatic proposal, and other recommendations in the report, immediately prompted a storm of criticism from interest groups, who said the recommendation, if put into practice, would condemn many people to a future outside of mainstream society.

Another proposal is that claimants already receiving a primary weekly social welfare payment should not qualify for payment under another scheme, including the family income supplement (FIS), ending what it terms “double payments”, saving €100m. A similar amount would be saved by discontinuing double payments for those on community employment (CE) schemes.

It also recommends treating the household benefits package as taxable income and changing aspects of the rent supplement and exceptional needs payments schemes.

The huge savings targeted in the social welfare sector include a 20% reduction in child benefit payments, with one example being the introduction of a standard rate of €136 a month for all children. Reducing and standardising the rate would lead to savings of €513m, the group said. It also recommends all possible efforts should be made to reduce staff numbers where possible through outsourcing and greater efficiency of services.

As an alternative to its proposal of a 5% cut in social welfare rates, the group’s report argues that a 3% reduction, reversing the increase of last October, would save €510m a year.

Irish National Organisation for the Unemployed (INOU) head of policy Bríd O’Brien, said the Special Group on Public Service Numbers and Expenditure Programmes, as An Bord Snip Nua is formally known, had not taken into account the difficulties faced by people because of changes in rent supplements and the axing last year of the Christmas bonus payments. As for the proposed scrapping of double payments, she said many people did not get all of both payments and that many people needed extra support to help them get back into the labour market. “A lot of people will be left behind and it will be harder and harder for them to enter mainstream society,” she said.

St Vincent de Paul (SVP) national president Mairead Bushnell said she was “shocked” at the proposals.

Head of social policy at St Vincent de Paul John-Mark McCafferty said the proposed cuts should be viewed as “five budgets in one”.

“We are worried about our capacity to respond to the needs that are going to be out there if these cuts are implemented,” he said. Calls for assistance to the SVP have already increased during the past two years, from 53% in the mid-west region, to 97% in Dublin and 71% in Cork.

There were “no positives” in the report, he said, citing the recommendation of removal of other payments to those on CE schemes and reduction of child supports as possibly leading to “a wholesale increase in child poverty”.

Focus Ireland said it is now vital for the Government to establish a true picture of the impact of recent welfare cuts before considering any of the proposals of An Bord Snip Nua, and has invited Minister for Social and Family Affairs Mary Hanafin to a meeting.

Age Action spokesman Eamon Timmins said: “Many of the cuts unfairly penalise the sick and the poor. The 5% cut in all social welfare rates will hit pensioners whose sole income is the state pension.”