Government Slices and Dices Budget Across Board; Most Vulnerable Hardest Hit

Many struggling families may suffer with an additional €1,000 a year loss after they’re hit by a bundle of stealth charges, with a second wave of additional pain possible. According to Brendan Howlin, Public Expenditure minister, said €2.2 billion in spending cuts would leave all middle-income families to deal with considerably higher bills, as reported in the Irish Examiner.

However, some of the harshest cuts were earmarked to those who are most susceptible such as folks who had disabilities and needed help from the state to heat their homes.

Some of the measures on the chopping block include:

  • Child benefit cuts of €19 for third child; €17 for four or more children
  • Back to school allowance cuts of €50 to €55
  • Charge increase for hospital private beds despite VHI warning that premiums could be driven upwards by nearly 50 percent.
  • Double of primary school transportation charge

Environment Minister Phil Hogan said a €100 household charge would be introduced to homeowners in January, saying it was a forerunner to a property tax. When put together, the measures could result in families having €1,000 or more less each year.

For example: a family with four child stand to lose €434 in the child benefit, would pay roughly €110 more in school transportation, and be subjected to a €100 charge if they’re homeowners. Plus, their healthcare premiums would double, pushing the bill to more than €1,000.

Finance Minister Michael Noonan placed additional pressure by the announcement of the budget’s second half, which includes VAT increase and carbon tax increases. This will make goods even more expensive.

However, cuts aimed at the most vulnerable in society were the ones that attracted much of the criticism.

The key social welfare rates escaped unscathed. However, the Fine Gael-Labour Coalition chooses to do the following:

  • Reduce disability allowance for persons between 18 and 21 by €88 a week; 22 to 24 years old -by €44
  • Decrease time for fuel allowance from 32 weeks to now 26 weeks, which will leave many older citizens choosing heat or food.
  • Decrease amount single parents are able to earn before seeing the family allowance affected.

​Howlin said the cuts were spread out fairly and the Government would take care of its most vulnerable.

Howlin admitted he was breaking a few election promises but said he never expected to make these kinds of announcements when he running for the position.

€755 million is being removed from the capital budget for infrastructure projects like roads and rails; €543m is being removed from the health sector; €475m from the social protection sector; €132m from the education sector; the remaining cuts come from other departments. The total amount being cut is €2.2 billion.

The Garda budget is being slashed by €79m, which will close 31 stations; overseas aid money is being slashed by €52.9m.

According to Sinn Féin, the Government is targeting those low and middle income families most at risk with the same austerity budgetary measures that Fianna Fail that ended up failing.

However, Government backbenchers are quiet, which suggests that most have accepted the cuts and won’t do anything about it.

Primary Cuts

  • Social welfare – €475m
  • Education – €132m
  • Healthcare – €543
  • Public service pay bill – €400m
  • Dept. of Environment, Community and Local Government – €34m
  • Dept. of Transport, Tourism and Sport – €45m
  • Dept. of Agriculture, Marine and Food – €105m

Glancing Look – Good

  • No decrease in weekly payments for social welfare
  • €20m allocation made to new labour market activation fund; this target long-term unemployed
  • Decrease secretarial supports and allowances for previous Taoisigh.

Glancing Look – Bad

  • Cut in third child payment to €148 a month; four or more child to €160, saving about €45m
  • Cut in fuel allowance from 32 weeks to 26 weeks, savings of €51m
  • Abolishment of back to school allowance for toddlers, savings of roughly €30m
  • Decrease of mortgage-interest supplement, savings about €22.5m
  • Decrease in student maintenance grants, post-graduates grant cuts, savings of €15m
  • Jobseekers’ benefits based on five-day, not six-day week, savings of close to €6m
  • Third-level student registration fees increase by €250, savings of €18.5m
  • Monthly drug payment scheme increases to €132, savings of €12m
  • Employer joblessness refund cut from 60 percent to 15 percent, savings of approximately €81
  • Single-parent family payment changes, savings of nearly €21m
  • More than 30 Garda stations to close in 2012, savings of €79m

Glancing Look – Ugly Cut

  • Primary school transport charge doubles to €100.
  • Disability allowance cut to €100 for 18 to 21 year-olds and €144 for 22 to 24 year-olds, down from €188

Article by Loans Ireland. Online information guide to loans in Ireland.

Image copyright infomatique.