Budget to cut €277m from child allowance

CHILD allowance cuts of at least €277m are looming, Brian Cowen signalled as the Government braced the country for a savage budget.

The Taoiseach appeared to reveal how deep impending reductions to the benefit would go when he indicated that ring- fencing the family payment as well as restoring the €223m welfare Christmas bonus would mean the state needed to find savings of €500m elsewhere.

The move came as Finance Minister Brian Lenihan insisted €4bn worth of spending cuts are unavoidable as pre-budget estimates showed the economy in dire straits, though facing a slightly less pessimistic future than projected.