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Child benefit and social welfare cuts come before Oireachtas

Dáil to debate changes to social welfare payments including child benefit and the jobseeker’s allowance as proposed in the Budget.

Image: Julien Behal/PA Wire/Press Association Images

THE SOCIAL WELFARE BILL will be debated in the Dáil today.

Announcing his Budget yesterday, Minister for Finance Brian Lenihan said the gap between government spending and receipts would reach €19bn this year, and that gap must be closed.

Lenihan said that there would be no reduction to the state pension next year, and an extra €14m will be allocated to the fuel allowance scheme, in view of the recent cold weather.

The following changes to social welfare payments were proposed in the Budget:

  • Child benefit will be cut by €10 for the first and second child, €20 for the third child, and another €10 for each subsequent child
  • Social welfare payments will be cut across the board by an average of around €8 per week, while the jobseeker’s allowance is down by €6 per week.
  • Maternity and adoptive benefits will also be cut by €8 per week
  • The supplementary welfare allowance is being cut by €10 per week.
  • Some of the tax advantages for pensioners were eliminated, although no change made to the state pension
  • People on social welfare will be expected to contribute an additional €2 per week towards their rent.

The Budget also introduces a new universal social charge, which rolls the health and income levies into one. This charge will be applicable on income over €4,000 – a massive drop on the €26,000 threshold for the existing charges.  The government says this charge is being introduced on a revenue-neutral basis and will apply at the following income thresholds:

  • 0% on income up to €4,004
  • 2% on income up to €10,036
  • 4% on income between €10,037 and €16,016
  • 7% on income greater than €16,016

This Budget brings an extra 300,000 people into the tax net for the first time. Until now, 45% of the workforce was outside the tax net, as no income tax was paid on incomes of €18,300 or less.

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By cutting tax credits and bands by 10%, this Budget aims to bring 60% of the country’s workforce into the tax net, which means that over 300,000 people will be paying tax for the first time in 2011.

The Social Welfare Bill will come before the Dáil at 6.30pm this evening for discussion, and will be voted on tomorrow afternoon.

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