Families will be as much as €1,000 a year worse off under budget cutbacks announced today, it has been estimated.
In the first half of an unprecedented two-day Budget announcement, the Government slashed child benefits, winter fuel, disability and back-to-school allowances.
Student fees were hiked up along with medical and school transport costs while a flat-rate property tax was introduced in the €1.4bn package.
Brendan Howlin, Minister for Public Expenditure and Reform, warned there was no magic wand but claimed public support for the potentially crippling savings.
“It provides the stability necessary to plan and work our way out of this crisis. It won’t be easy, and we will not resolve our problems overnight,” he said.
“No government, whatever its numbers, wants to be the bearer of bad news. But our options are extremely limited. The public knows this. It is wary of those who offer simplistic options.”
The hard-hitting cutbacks will be compounded tomorrow by a 2% VAT increase, fuel and motor tax hikes and new levies for employees holding property or stock investments.
A family of four can expect to suffer a €432 a year cut to their child benefit payments and soaring health insurance premiums as the State pulls out of private health subsidies – expected to force up insurance fees by about €500 a year.
The raft of other spending cutbacks – spread wide across allowances and Government departments – will take more than €1,000 a year out of average family budgets.
Mr Howlin claimed weekly dole payments had been saved from the cuts but then revealed part-time workers will see their benefits targeted, ultimately falling by a fifth.
Employers did not get away unscathed as a special redundancy rebate has been drastically reduced from 60% to 15%.
Fianna Fáil spokesman Sean Fleming said: “There are a number of decisions that you have announced here today that are simply unfair and unpalatable – you’re hitting the old by hitting fuel allowance, you’re hitting the young by hitting child benefit.”
Mary Lou McDonald, Sinn Féin public expenditure and reform spokeswoman, accused the Fine Gael-Labour coalition of smashing promises.
“Rising unemployment, emigration, the collapse of our domestic economy and the misery facing struggling families are a damning indictment of Labour and Fine Gael’s record in government,” she said.
“They chose to protect those on sky high wages and pension payouts in the upper echelons of the public sector.
“There’s no chance of this Government giving a ’times are tough’ pep talk to judges, hospital consultants and former failed taoisigh on big buck pensions.”
Some of the most hard-hitting measures – enforced as part of Ireland’s €85bn EU-IMF bailout loan programme – slashed disabled allowances by 60% in some cases, cut winter fuel payments by a fifth and forced students to pay €2,250 to register at college.
Other measures include:
- The State will no longer pay for private care in public beds, expected to force up insurance fees by about €500.
- Public service pay bill slashed by €400m through a 10% cut in overtime and 5% in allowances.
- Thirty-one garda stations to close.
- Disability payments for 18- to 21-year-olds cut by €88 to €100 and for 21- to 24-year-olds by €44 to €144.
- School transport fees doubled to €100 a year.
- Overseas Development Aid spend cut by €52.9m.
- The one-off €635 grant for a multiple birth has been scrapped.
- Qualifying age for the back to school clothing and footwear increased from two to four years – payments also cut from €305 to €250 and €200 to €150.
Mr Howlin rejected accusations that he was targeting those on social welfare.
“We can only deal with the reality that we have. It’s the real figures. That’s the reality we are facing now,” he said.
“I’m certainly not in the business of cutting where I don’t have to. If we can provide as best we can the best social protection network to protect the most vulnerable, that’s the objective of this Government.”
Child benefit will be brought down to €140 for all children over the next three years.
Mr Howlin said means testing would be too expensive and justified the cuts by claiming that raising a third and fourth child was less expensive than the first two.
Social justice campaigners attacked the measures.
The Society of St Vincent de Paul said: “We know that the proposed increases in indirect taxation that have already been flagged by Government will be much harder to bear for those on low incomes and we fear that the families who have been hit today look set to be hit by tomorrow’s announcements as well.”
Age Action said the 20% cuts to fuel allowance would create huge hardship.