Child welfare cut in budget flagged

A €10 cut to child benefit is expected to be announced in the upcoming budget. Some 600,000 households receive the universal rate which will fall from €140 to €130 in a measure that is expected to save the State €138 million in a full year and is likely to be the biggest single cut in social protection.

The Cabinet has been meeting this week to discuss next Wednesday’s budget.

A report commissioned by the Department of Health suggests introducing a “payroll tax” to fund increased health spending.

“A new source of statutory revenue could be introduced, for example a payroll tax earmarked for health to supplement general revenues,” the report says.

It also recommends hikes on alcohol and the creation of “sin taxes” on certain foods. The report justifies these taxes on health grounds, adding that they would result in reduced consumption and increased tax revenue.

Meanwhile, media reports today suggest medical card holders face a doubling of the 50 cent prescription charges in the Budget. Changes to the over-70s medical card and the home package of free TV licence, electricity and telephone allowances are also being considered.

It has also been reported that the time for which non-means-tested dole is paid will be cut from 12 months to nine months.

It is also understood the Cabinet has given formal approval to Attorney General Máire Whelan to draft legislation for the introduction of a controversial property tax.

Meanwhile Minister for Transport Leo Varadkar today said there “may be an increase in carbon tax” but he was not aware of any plans for a fuel price increase.

The major reason for the increase in fuel prices in the last two or three years “is not taxation it’s the increase in the price of oil,” Mr Varadkar said at Malahide Castle.

Asked about increases in Vehicle Registration Tax he said “any increase in taxation is going to be used to reduce the deficit”.

The Cabinet will meet for a third time tomorrow to finalise a budget package. Government sources indicated last night the property tax will be levied at the rate of 0.2 per cent of market value. This means that a property tax of €500 will be levied on a house worth €250,000 with €1,000 falling due on properties worth €500,000.

Reports emerged today that elderly people will have the opportunity to have the property tax on their home deducted from their estate after they have died.

Council house residents face a rent increase of €1 to €2 a week, which will generate €50-€100 a year per house