Crisis welfare costs €100m to June

EMERGENCY welfare payments have ballooned to a cost of €100 million for the first six months of this year, as more people than ever look for extra help to survive.

Almost 42,000 people are now in receipt of emergency payments under the basic supplementary welfare allowance scheme, the so-called “safety net” of the social welfare system.

The cost of the payments in the whole of 2007 was €150m, with just 27,379 recipients. This increased to 35,546 people at the end of 2008, costing €184m for the year.

With costs for the first six months of the year hitting €100m and the number of recipients exceeding the total number in 2008, fears are mounting the total cost for this year will break records.

The supplementary welfare allowance scheme was designed to provide a small weekly allowance to people with little or no income. It is administered on behalf of the department by the Health Service Executive’s community welfare officers and each payment is at the discretion of the individual officer.

The latest figures show that almost 20,000 of those currently in receipt of the payment are awaiting jobseekers’ benefit.

In excess of 4,000 are awaiting a disability benefit and almost 4,000 lone parents are in receipt of the emergency payment.

The news comes as the ESB confirmed it is cutting off an average of 900 people a month from electricity supply after a prolonged period of failure to pay bills.

In further evidence of ordinary people’s increasingly dire financial circumstances, the latest figures from the Money Advice and Bugeting Service (MABS) reveal its new client figures are up 10% from the same time last year.

The MABS figures show it assisted almost 13,000 new clients in the first two quarters of the year.

Michael Culloty of MABS said there was no let-up in the number of desperate people seeking assistance. He said most people were in difficulty not because of any reckless spending or borrowing, but purely because of a change in circumstances.

More than 11,000 of MABS’ new clients this year are high-support clients: those who have been assisted to negotiate repayment plans with their creditors, and special account clients whose repayment plans are supported through a MABS special account scheme, a bill-paying facility operated in partnership with credit unions.

In excess of 6,000 of the high-support clients are aged between 26 and 40, with more than 2,500 of those married with children. Almost 2,000 are single with children.

The statistics show that almost 4,500 have a mortgage.

Mr Culloty said this had started off from a very small base, and now mortgage-holders made up about one third of clients.

“These are people, mainly families, who had jobs and who have now lost one or both of them and are finding it extremely difficult.”

The figures also show that almost 70% of MABS clients are primarily living off social welfare.

Personal loans with financial institutions made up the highest category with 6,219 people owing money to them. The next highest category under which debt was an issue was utilities at 4,133, followed by credit cards at 3,537.