Minister Burton's Budget package protects pensions, other weekly welfare payments and Child Benefit


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Welfare reform is helping people back to work and has lowered spending reductions required

The Minister for Social Protection, Joan Burton T.D., has today (October 15, 2013) confirmed that core weekly welfare payments and Child Benefit are being protected in Budget 2014. A range of supplementary benefits, including Fuel Allowance, Electricity/Gas Allowance, Free Travel, Free TV Licence and the Respite Care Grant are also being protected.

The Department is making €226 million of expenditure reductions in the Budget, significantly less than the €440 million originally requested of it.

An additional €30 million in savings will be made through enhanced fraud and control measures in 2014, while €34 million will be saved through through increased efficiencies and lower than expected demand on some schemes, bringing the Department's cumulative adjustment to €290 million.

Minister Burton said the lower adjustment is principally due to the Department's performance in helping people back to work through its Pathways to Work strategy.

"Since coming to office, I have focused on transforming the Department from the passive benefits provider of old to an active, engaged and focused employment service. This is now paying off, with the Live Register down by 20,000 over the past year.

"Chiefly as a result of this progress, I have been able to lower the expenditure reductions required of my Department to €226 million. This crucial leeway means that I can continue to protect the State Pensions, Carer's Allowance, Disability Allowance and other core weekly payments upon which people depend, and important additional benefits such as the Half-Rate Carer's Allowance, Fuel Allowance, Electricity/Gas Allowance, Free TV Licence and Free Travel," the Minister said.

"The Live Register will shortly fall below 400,000 for the first time since May 2009. That is still far too high, of course, but we are making firm and visible progress. And that progress feeds into the continuing improvement in the public finances. Getting people back to work is the most effective way of reducing welfare spending – and we are doing it."

During Ireland's Presidency of the EU Council, Minister Burton brokered agreement on the EU-wide Youth Guarantee, which, once implemented from 2014 onwards, will offer jobseekers under 25 year olds good-quality employment, training or educational opportunities.

As part of this, the Department will further develop the range of opportunities currently on offer to young people in the form of internships, participation on employment schemes, subsidised private-sector recruitment, and supports for self-employment.

The full range of youth employment initiatives will be set out in the Government's plan for the implementation of the Guarantee, which is to be submitted to the EU by the end of the year.

Measures will include:

  • Incentivising employers to offer more job opportunities to young people by reducing the threshold for JobsPlus eligibility. JobsPlus offers direct cash grants to employers to hire people who have been long-term unemployed. Currently, a person must be 12 months out of work before they can be deemed eligible. That will be reduced to six months or less, creating more opportunities on this scheme.
  • Providing for an additional intake of 1,500 young people to the JobBridge national internship scheme.
  • Ensuring that 1,000 places on the Department's Tús community work placement scheme are targeted at young people.
  • In a further measure to support young adults, a minimum of 2,000 training places will be ring-fenced by the Department of Education and Skills for under-25s. These places will be provided under a follow-up to the successful Momentum programme that operated in 2013.

In parallel, the Department is announcing changes to income support for young people. With effect from January 2014, people without children aged 18-24 years in receipt of Jobseeker's Allowance will receive €100 per week unless they are an existing claimant on a higher rate, in which case their rate will not change.

People without children aged 25 years in receipt of Jobseeker's Allowance will receive €144 a week, again unless they are an existing claimant on a higher rate in which case their rate will not change. This weekly €144 rate will increase to €188 when they reach 26 years of age.

People under age 26 years who participate in a Back to Education course will have their Jobseeker's Allowance increased to €160 per week.

These measures are part of a focused shift from income support to services, with a total of €46 million to be invested in youth employment initiatives across a number of Departments.

"These changes are about emphasising the importance of services over income support. Young people face a very difficult jobs market, and need assistance in the shape of work, training and education services," Minister Burton said.

"I want to ensure that, in addition to the enhanced career and job prospects from improving skills and education levels, young people are financially better off in education, employment or training than claiming."

In addition to the increased spend on activation services, demographic pressures in the shape of the increasing number of pensioners will see expenditure on pensions increase by almost €100 million over what we expect to spend this year to €6.5 billion next year. But these increases are being successfully managed within the Department's budget and overall Department expenditure will fall below €20 billion in 2014.

The Minister said this demonstrated that the Department is playing its part in the necessary effort to repair the public finances and reduce the deficit, while at the same time, ensuring that welfare continues to provide a safety net for those who need it.

"My Department has three core functions – to protect those most in need, to provide a pathway back to work for jobseekers, and to root out welfare fraud. The reforms undertaken to date are helping people back to work and are producing significant savings. Allied to prudent budgetary management by the Department and a zero-tolerance approach to welfare fraud, it means we can and are protecting critical welfare payments for people in need of them."

Main Social Welfare elements in Budget 2013

Older people
The biggest single block of expenditure in the Department is expenditure on pensions which will amount to €6.5 billion.

The State Pension for older people will continue to be paid at current levels. There are no changes to the Free Travel, Free TV Licence, Fuel Allowance, Electricity/Gas Allowance, Over 80 Allowance, Islander Allowance and Living Alone Allowance. Their values are being maintained.

The annual payment to RTE for the Free TV licence will reduce by €5 million to €54.17 million. This will not affect Free TV licence recipients, who will continue to receive their free TV licence.

The Telephone Allowance (€9.50 per household per month) will be discontinued for all recipients from next January. The savings from this measure will be €44 million.

Children and Families
No changes will be made in this Budget to Child Benefit.

The Back to School Clothing and Footwear Allowance will continue to be paid for students aged 18 years or over who are in second-level education. It will no longer be paid for those aged 18 or over in third-level education.

Carers
The weekly rates of Carer's Allowance and Carer's Benefit will remain unchanged in 2014 as will the half rate Carer's Allowance for full-time carers who are getting another weekly welfare payment.

The extra weekly payment for caring for more than one person will be retained.

The annual Respite Care Grant of €1,375 for each care recipient will be maintained.

Jobseekers
People without children aged 18-24 years in receipt of Jobseeker's Allowance or Supplementary Welfare Allowance will receive €100 per week unless they are an existing claimant on a higher rate, in which case their rate will not change.

People without children aged 25 years in receipt of Jobseeker's Allowance or Supplementary Welfare Allowance will receive €144 a week unless they are an existing claimant on a higher rate in which case their rate will not change. This weekly €144 rate will increase to €188 when they reach 26 years of age.

All jobseekers aged 18-25 years who participate in the Back to Education Allowance scheme will receive €160 per week.

Maternity and Adoptive Benefit
The minimum and maximum rates of Maternity Benefit and Adoptive Benefit will be standardised at €230 per week for new applicants.

Illness and disability
The number of 'waiting days' for Illness Benefit will be increased from 3 to 6 days. A person will not be entitled to Illness Benefit for the first 6 days of any period of incapacity for work.

In line with the abolition of the State Pension Transition from January 2014, the weekly rate of €230.30 for Invalidity Pension at age 65 years will be discontinued and the rate payable will be €193.50 per week. This measure will apply to Invalidity Pensioners who reach their 65th birthday from January. Existing 65 year olds are unaffected. People who are getting Invalidity Pension (existing and new recipients) will continue to be automatically transferred to State Pension (Contributory) at age 66 years and they will receive a weekly rate of €230.30.

The weekly rate payable to all qualified adults of Invalidity Pensioners will be standardised at €138.10 per week. This measure will apply to spouses and partners aged 66 or over who reach their 66th birthday from January 2014. Existing spouses and partners aged 66 and over are unaffected.

From next year, the value of certain social welfare payments will be recovered by the Department from insurance companies in respect of compensation awards arising from an accident or injury.

Rent and Mortgage
The minimum contribution towards Rent Supplement for all couples will increase by €5 per week from €35.00 to €40.00 to align Rent Supplement contributions with the Local Authority rents structure. Similarly, the minimum contribution towards Mortgage Interest Supplement for all couples will increase by €5 per week from €35.00 to €40.00. The minimum contribution for single people, including single people with children, will not change.

The Mortgage Interest Supplement scheme will be discontinued for new entrants. For existing recipients, the scheme will be wound down over a four-year period from January 2014. The savings arising from this measure in 2014 will be €12 million.

Bereavement Grant:
The Bereavement Grant of €850 will be discontinued; this will result in savings of €17 million. Other supports provided by the Department to assist with the cost of bereavement, which includes the Widowed or Surviving Civil Partner's Grant of €6,000, will not change.

Budget Factsheet 2014 (PDF 322KB)

Last modified:15/10/2013
 

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