Hanafin warns of welfare cuts


There will be cuts in social welfare rates and changes in child benefit in the next budget, the Minister for Social Affairs Mary Hanafin admitted today.

Ms Hanafin said that it would be “impossible” to look at ways at cutting public expenditure, without considering reducing social welfare payments.

Speaking on RTÉ’s Morning Irelandearlier today, the Minister said although cuts are expected, she would do her utmost to protect the most vulnerable members of society.

“Between now and September, we have to work out what savings can be made, while protecting people who are genuinely dependent on social welfare and are very vulnerable,” she said.

Referring to the recently published McCarthy report which identified potential cuts of €1.84 billion in the social welfare budget, Ms Hanafin made it clear that she didn’t expect cuts to be that severe.

However, she added that the €21 billion social welfare bill was a "huge drain" on public finances and that it would therefore be "impossible" to have a budget which is aimed at reducing expenditure without looking at reducing social welfare.

The McCarthy report, which was published last month, pointed out that welfare spending had increased from €17.62 billion last year to a projected €21.27 billion this year, and would amount to 37 per cent of all current Government spending. It said social welfare rates had increased by between 90 per cent and 110 per cent since 2000, amounting to an increase of 67 per cent in real terms.

Asked if she was going to resist cuts, the Minister said: "I'm going to fight to protect the vulnerable as much as possible, but I do accept that you cannot avoid cutting the social welfare budget . . . if you are going to get the type of savings that are needed."

On child-benefit, which she said was "closely guarded by mothers throughout the country," Ms Hanafin refused to be drawn on whether it would be means-tested or taxed. "What I am trying to do is make out the system that is fairest to all . . . I don't have a preference as yet [on means-testing or taxation] it cannot stay at the amount it is at, it has almost tripled over the last few years."

She said options also including cutting the payments, as recommended by McCarthy, and reducing payments for the third and subsequent children. The Minister added that she was awaiting the report from the Commission on Taxation on the issue.

"I want to see, as a package, how are all of these measures . . . going to impact on families."

Ms Hanafin said she would present the Department of Finance with a "list of options" that would indicate what each scheme in social welfare would save and the impact that cuts there would have.

However, she warned: "There will undoubtedly be changes in child-benefit; there will undoubtedly be cuts in the social welfare budget."