Coalition sources indicate restoration of respite care grant

A reversal of one the most controversial cuts implemented by the Government is under consideration for next month’s budget, the Coalition’s last play before the general election.

Sources said a restoration of the respite care grant, which was reduced by €325 in budget 2013, is under consideration within senior Government circles.

However, it is not yet clear if Tánaiste and Minister for Social Protection Joan Burton will have enough money available to fully restore the cut or will instead opt for partial restoration, if the move is included in her spending package.

In the last budget, Ms Burton partially restored previous cuts to child benefit and the social welfare Christmas bonus scheme.

The respite care grant cut announced in budget 2013 meant 77,000 carers had their grant reduced from €1,700 to €1,375 at a saving of €26 million per year to the exchequer.

They were announced in the same budget in which child benefit was cut by €10 for the first, second and third child. Ms Burton partially reversed the cut in last year's budget by increasing child benefit by €5, a move expected to be repeated on October 13th when Budget 2016 is published.

“If you think of the cuts we really didn’t want to do, those would be two,” said a source of the reductions in child benefit and the respite care grant. “There are a number of options on the table at the moment. Nothing has been decided yet.”

Ms Burton's department has yet to submit her budget spending bid to the Department of Public Expenditure and Reform. Any increase is the old age pension is seen as unlikely.

Ms Burton is expected to make the case for further reductions to the Universal Social Charge (USC) at the opening of the Labour parliamentary party think-in in Wicklow on Monday.

It was reported over the weekend that a 2 per cent cut in the 7 per cent USC rate levied on incomes between €17,577 and €70,044 is also under consideration.

USC focus

However, a Government source said Taoiseach Enda Kenny had already said income tax reductions will focus on the USC. Mr Kenny also indicated a reduction in the range of 1 per cent to 1.5 per cent on the 7 per cent rate. While a larger, 2 per cent cut is not ruled out sources said no decisions have yet been made.

One Government source said enough money must be allocated with the €750 million available for tax cuts in the budget towards helping employers.

“If there is going to be an increase in the minimum wage, we have to protect those who create jobs,” said the source. Ms Burton’s spokesman refused to comment on budgetary speculation.

In a letter to Labour Party supporters this weekend, the Tánaiste said she is to push for a change in the 50:50 split between tax reductions and increases in future budgets.

She said this would be a crucial part of the party's election platform and warned this would be a "key difference" to Fine Gael.

Ms Burton encouraged members to support the proposed voting pact with Fine Gael, which she said was necessary for the party to go into election on their “own, strong and independent” platform.

“That ensures that in subsequent programme for government negotiations, and indeed over the length over the next government term, we will have a mandate to drive home key Labour Party goals, just as we’ve done in this term.”

Ms Burton said Fine Gael and Labour have a strong working relationship and it “makes sense that we should fight for the return of this government”.