Young and old targeted in welfare cuts

Reductions in dole payments for under-26s and allowances for pensioners

Young and older people have been targeted in a range of Budget spending cuts announced today.

However, child benefit rates, basic social welfare payments for people of working age and pensions remain unchanged.

For young jobseekers, a lower €100 dole rate will be extended from to new entrants aged under 25 from next January. The rate previously applied only to those age under 22.

In addition, those aged 25 will get a reduced rate of €144. Only those aged 26 and upwards will get the full jobseekers’ rate of €188.


Minister for Social Protection Joan Burton said the savings would be invested in youth employment measures, as part of a shift away from income support towards work, education and training. “Signing on for jobseekers’ allowance on a person’s 18th birthday is not the start to adult life any parent would want for their child,” she said. “We need to be more ambitious for our young people.”

For older people, there will also be a range of welfare cuts. The telephone allowance - worth €9.50 a month- will be scrapped from January next. In addition, the bereavement grant - worth €850 - is to be axed from the beginning of next year, while the income threshold on medical cards for over 70s is to be lowered.

Ms Burton said the move to make these cuts was as a result of trying to protect pension rates and the fuel allowance.

Young families, however, have not been spared by welfare cuts. The rate of maternity benefit will be standardised at €230 per week for new claimants from January.

This means the vast majority of mothers - some 23,800 - who are on the higher rate and face cuts of up to €32 per week. Those on the lower rate - just 275 or so - will see their rate increase by up to €12 per week.

The move will affect thousands of women and save the Government an estimated €30 million.

Ms Burton defended the move on the basis that the duration of our maternity benefit - at 26 weeks - will be maintained. She said similar benefits in other jurisdictions, such as France, have just 16 weeks of maternity benefit.

Other welfare changes include:

* An increase in the number of waiting days for entitlement to illness benefit is from three days to six days. This will save an estimated €22 million.

* An increase in the minimum contribution of towards rent supplement for couples of €5 per week. Single people will not be affected.

* The end of the mortgage interest supplement for new entrants. For existing recipients, the scheme will be wound down over a four-year period.

While Ms Burton’s department was originally requested to make savings of up to €440 million, the cuts announced today make up just €226 million.

The Minister said the lower adjustment was as a result of helping people back to work and consequent reductions in welfare expenditure.

“This crucial leeway means I can continue to protest State pensions, carer’s allowances, disability allowances and other core weekly payments upon which people depend,” she said.

The Budget also contained funding to provide nearly 300,000 places in work, education and training programmes across the Departments of Social Protection and Education.

A “youth guarantee fund” worth €14 million has also been announced, which will support additional training or employment for people under 25.

Carl O'Brien

Carl O'Brien

Carl O'Brien is Education Editor of The Irish Times. He was previously chief reporter and social affairs correspondent