Taoiseach, ministers under fire for cuts targeting older people

Taoiseach Enda Kenny has defended cuts in yesterday's Budget that will largely affect older people, while ministers Michael Noonan and Brendan Howlin have also come out fighting against criticism of the measures.

Amid rowdy scenes in the Dáil this morning, Mr Kenny came under fire from Fianna Fáil over the cuts to medical cards, the bereavement grant and abolition of the telephone allowance.

Fianna Fáil leader Micheál Martin's dubbed the measures "taking money from older people by the back door".

But the Taoiseach insisted that older people had benefitted from decisions not taken in the Budget.

"The state pension, the carers's schemes, the free travel, the free televisions licences… have not been touched," Mr Kenny said.

"And because we recognise that fuel is a big issue for the elderly, the fuel allowance has not been changed, and excise duty on fuel has been left untouched as well.

"Those aged 65 and over will continue to be treated more favourably under the Irish income tax code than all other taxpayers."

Meanwhile, Finance Minister Michael Noonan was forced to defend his decision to hike the cost of beer, cider and a measure of spirits by 10 cent, and a bottle of wine by 50 cent.

He said while he increased excise duty on alcohol, budgetary measures to stimulate the economy will eventually result in people having more money to spend in pubs.

“Alcohol is a discretionary item and rather than tax the necessities of life, I think it is reasonable to put an imposition on excise by way of alcohol and tobacco,” Mr Noonan said.

Speaking on RTÉ Radio One's Today with Sean O'Rourke programme, Minister Noonan said he maintained the special rate of VAT on tourism and leisure-related services at 9%, left income tax rates and the Universal Social Charge untouched, and put a lot of money into getting people back to work.

“As we grow the economy, stimulate the economy, get more people working, you will see the benefit coming into you if you run a good business,” he told a hard-pressed publican.

Speaking on the same programme, Public Expenditure Minister Brendan Howlin rejected suggestions the Government followed the example of Conservatives in Britain in drafting the latest austerity budget.

The minister, who unveiled public spending cuts to the value of €1.6bn as part of the overall €2.5bn adjustment yesterday, said Ireland’s economy could not be compared to Britain’s.

“Britain has a completely different social welfare system, much inferior to ours,” he told Mr O'Rourke.

“Look at the care packages for the elderly in the north of Ireland or in Britain. It is fundamentally poorer than the good support packages that we give even in the most difficult of times.

“And we are proud of that and we worked might and main to protect that.”

The ministers were also challenged on plans for a major review of medical cards, in which they hope to save €113m.

Health Minister James Reilly was unable yesterday to give even an estimate of how many people will lose a card as a result of increased scrutiny of eligibility.

He did confirm that up to 35,000 elderly people – over the age of 70 – will lose their full medical cards, which will be replaced with a free GP card.

Mr Noonan and Mr Howlin also faced criticism for cutting dole payments to young people, which will be slashed by nearly a third.

Anyone aged 25 and under who signs on from January will get just €100 a week, down from €144, while 25-year-olds can claim €144, reduced from €188 – the full rate which will still be available to those aged 26 years and over.

Despite a series of cutbacks targeting the elderly, the ministers also insisted they strove to protect them.

Even with the tightening up of the eligibility for the over-70s medical cards, the removal of the telephone allowance of €9.50 per month and the scrapping of the so-called bereavement grant, Mr Howlin said there was still “a very robust package” for pensioners.

Mr Noonan added: “We are protecting the older generation, because we appreciate the contribution they have made to the country. We didn’t touch pensions, either contributory or non-contributory pensions.

“But more importantly, we didn’t touch income tax credits for the elderly, which are very enhanced. If you take for example a couple of pensioners living together – man and wife, husband and wife – they pay no tax until their income passes €36,000.

“And we have single people going into the 41% rate of tax, just above that level. So the benefits in the tax law for elderly couples are totally preserved.”