Social welfare rates must increase by €25 a week in next month’s budget and child benefit by €50 a month to prevent the poorest becoming “even poorer” in 2024, Social Justice Ireland (SJI) has warned.
These payments currently stand at €220 and week and €140 a month, respectively.
In its pre-budget submission published on Monday, the independent think tank said one-off payments, such as the energy credits in last year’s budget, were welcome but failed to properly address the plight of the poorest.
This will necessitate benchmarking core welfare rates at 30 per cent of average earnings, it said.
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“Government will repeat the mistakes of last year and deliver a regressive budget if does not prioritise income adequacy over one-off payments,” says the SJI submission. “Instead of again relying on one-off payments, Government must make income adequacy and the benchmarking of social welfare rates to average earnings a key focus of Budget 2024.”
It said if core welfare rates are increased by €25 a week, child benefit by €50 per month and unemployment assistance for 18-to-24 year-olds restored to the full rate (this age group receives reduced rates) – the Government would “move us towards the benchmark of 27.5 per cent of average weekly earnings [which would be ] hugely important to improving the living standards of many in Irish society, and to achieving anti-poverty commitments”.
In terms of those receiving disability allowance, the body calls for an additional cost-of-disability payment of €20 per week, as well as increased investment in disability services, including respite and personal-assistant services, and the allocation €40 million to properly implement of the UN Convention of the Rights of Persons with Disabilities.
SJI is also seeking the restoration of the bereavement grant, extension of the fuel allowance to working-poor families with children and a piloting of a universal basic income for carers.
On housing, SJI said just 9 per cent of housing stock is social housing – far below European norms – and a target of 20 per cent by 2030 should be set.
“This would equate to an additional 232,800 social housing units to be delivered in the next eight years, starting with an increase of €1.4 billion in capital expenditure in Budget 2024. [The Government’s strategy] Housing for All commits to just 90,000 but lacks clarity over how 42,500 of those could be delivered,” says SJI.
Targeted tax reforms will be needed, it said – including an increase in capital gains tax and capital acquisitions tax from 33 per cent to 35 per cent, as well as a 2 per cent increase in the minimum effective tax rate for those earning €400,000 or more annually.
The €200 annual charge on second homes should be restored, it said, while the betting duty should be increased to 3 per cent.
The think tank is calling for Budget 2024 to be divided into two funding streams, with once-off windfall tax gains from higher-than-expected corporation tax receipts invested “only in one-off and infrastructure projects, and accounted for separately”.
Alongside this the “normal budget should be presented using the regular budget process”, SJI said. “This would mean that Government could then ensure that regular budget expenditure is funded through recurring revenue and there would be no sudden surprises of discovering a huge shortfall in revenue when the windfall taxes no longer flow.
“These two parts of the budget can then be brought together to provide the overall budget picture. This would ensure full transparency of the budgetary process as well as guaranteeing there will be no surprises following a downturn in the years ahead.”
It also called for a new social contract, based on social dialogue involving Government, trade unions and employers; the community and voluntary sector; and farmers and the environmental sector.
