13 November - Social Welfare Spending To Rise To ?10.65 Billion - Mary Coughlan

Print page

Mary Coughlan TD, Minister for Social and Family Affairs, today announced that social welfare spending would rise in 2004 to a total of €10.65 billion even before any announcements in the December Budget.

"I am pleased to have secured an increase in the Social Welfare Estimate this year which underlines this Government's commitment to the elderly, to caring for our children, those less well off, those who are sick, unable or incapable of caring for themselves and those who find themselves unemployed," said Minister Coughlan.

"This represents year on year increases under this Fianna Fail led Government in social welfare spending - for example in the year 2001 the social welfare budget totalled €7.8 billion and this year will reach the highest ever spend of €10.65 billion before budget measures - an increase of over one third in three years."

"Increases over this period have largely been directed into improving the rates of payment in line with Government commitments and it is important to remember that today's published Estimates do not include additional social welfare increases which will be announced at Budget time," said Minister Coughlan.

An estimated 970,000 people on average are expected to claim weekly social welfare payments next year and almost 1.5 million people (including dependents) will benefit from these payments.

Some of the main areas of increased expenditure are:

Increased Expenditure By Scheme


Amount of Estimated Increase

Child Benefit


Old Age Contributory Pension


Widow & Widower's Contributory Pension


Disability Allowance


Supplementary Welfare Allowance


"This Government has set a responsible and steady course for the long term and the publication of these estimates brings us half way through the process which culminates in the publication of the Budget next month to secure a better deal for those who are vulnerable, less well off or disadvantaged."

"The 2004 Estimates are framed to stay within the overall spending guidelines agreed by the Government, despite some spending pressures, such as a substantial increase in claimants for child benefit payments, increased utility prices on the free schemes and an increase of almost ten per cent in the numbers of people claiming rent supplement payments. The numbers have increased to 60,000 people at a cost of almost €330 million per year."

"Because of a variety of factors including increased demand on certain schemes, improved payments and most importantly the need to ensure prudent management of the social welfare budget, a number of schemes have been reviewed and adjusted to ensure sound management of public funds and ensure that I am in a position to care for those less well off, disadvantaged, ill or unemployed by providing pensions, unemployment assistance and other social welfare payments," added Minister Coughlan.

These measures are as follows: The qualifying period for Back to Education Allowance (BTEA) will be increased from 6 months to 15 months in respect of the Third Level Option. This measure focuses available resources at those in greatest need of an intervention to prevent them from drifting into long-term unemployment and does not affect existing recipients of BTEA. This measure still allows people to avail of the second level option after 6 months in receipt of a payment. This effectively recognises the more urgent need for an intervention in the case of people who have not completed secondary education.

The transitional half rate payment for lone parents is to be discontinued where a recipient of One Parent Family Payment takes up employment where earnings are in excess of the upper threshold of €293 per week. The present earnings disregard enables lone parents to retain a significant level of income support in the transition to full time employment and lone parents will be encouraged to also avail of the Family Income Supplement which is the main in-work benefit for families on low income with children.

The minimum contribution all recipients of Supplementary Welfare Allowance Rent/Mortgage Supplement are required to make towards their accommodation will be increased by €1 per week to €13 per week.

Supplementary Welfare Allowance (SWA) is not payable to people in full-time employment. In future, if one of a couple is in full time employment, both are excluded from claiming rent/mortgage supplement.

This measure gives effect to the original intention that SWA should not be paid in cases where there is full-time employment in the household.

Health Boards will be given the power to refuse rent supplement in cases where the applicant has not already been renting for a period of six months, with provisions for exceptions in relation to people who are homeless or where there are other compelling reasons. The purpose of SWA Rent Supplement, like other social welfare programmes, is to meet income maintenance needs, not long-term housing needs. This measure is needed to re-focus the scheme on income maintenance e.g. existing tenants who become unemployed and can no longer afford their rent.

One of the conditions for receipt of Rent Supplement is that the tenant must be in need of accommodation and is unable to provide for it from his own resources. For the most part, Health Boards decide whether an applicant for Rent Supplement is in need of accommodation without reference to the local authority. In future claimants for Rent Supplement will be referred to the Local Authority for an assessment of housing need in a more systematic manner. This measure will lead to an increased role for local authorities in this area. In addition, ways of improving the service given to people with long term housing needs are currently under discussion with the Local Authorities.

Furthermore, Rent Supplement will no longer be paid to people who refuse offers of local authority accommodation or to people who leave local authority accommodation without reasonable cause.

A supplement given to recipients of Supplementary Welfare Allowance who have been supported by the Money Advice and Budgeting Services in brokering a deal with creditors will be discontinued. This supplement has, in effect, been a subsidy for creditors - such as banks and lending institutions. The normal support service of the Money Advice and Budgeting Service will not be affected by this measure.

As a result of state expenditure on crèche care and increased Child Benefit payments, the crèche supplement will be discontinued. In addition, the diet supplement, which has become outdated in the context of increases in welfare payments in the past number of years, is being phased out over a number of years.

A number of measures are also being taken which will remove anomalies or better target resources paid from the Social Insurance Fund, in particular affecting short-term benefits such as Unemployment Benefit and Disability Benefit.

These measures are:

  • The entitlement to half-rate child dependant allowance (CDA) in respect of Unemployment Benefit and Disability Benefit claims will be discontinued where the claimant's spouse/partner has gross weekly income in excess of €300. This measure directs the current resources towards families at the lower income level.
  • The current weekly earnings threshold for the purposes of payment of reduced rates of Disability and Unemployment Benefit are being increased from €88.88 to €150. The present thresholds have not been updated since 1993 and consequently now represent a serious disincentive to employment.
  • Entitlement, for new claimants to half-rate payment of Disability Benefits and Unemployment Benefits where recipient is already in receipt of Widow/Widowers Pensions or One Parent Family Payments will be discontinued. This measure is designed to remove anomalies in the current system and follows a general principle, common to social security systems across the world, that a person is only entitled to one income maintenance payment at any one time.
  • Increase the underlying number of paid contributions required from 39 since first entering insurance to 52 for entitlement to Disability, Unemployment and Health and Safety Benefit. This measure is designed to more closely relate the contribution conditions for those benefits to the level and duration of the benefits being provided.
  • An increase in the period where claims for Unemployment Benefit and Disability Benefit are linked with a previous claim from 13 weeks to 26 weeks.
  • The maximum duration of Unemployment Benefit will be reduced from 390 days to 312 days where a person has less than 260 PRSI contributions paid since first entering employment. This measure recognises a longer, sustained employment record by more favourable treatment in terms of subsequent entitlements.

Of the total Estimate, some €5.73 billion will be provided by the Exchequer (€5.67 billion in the Department's Vote and €0.06 billion in other Votes) and €4.92 billion will be provided by the Social Insurance Fund. The Social Insurance Fund expenditure is financed in full by PRSI contributions paid by employers, employees and the self-employed.

The Exchequer figure represents a 2.5% increase (€137.5million) on last year and the Social Insurance Fund figure represents an increase of 5% (€218 million).

ENDS November 13th 2003

Last modified:11/09/2008