Analysis and Critique of Budget 2007

CORI Justice Analysis and Critique of Budget 2007 Download Pdf

Historic Breakthrough as Welfare Benchmarked

Budget 2007 marks a historic breakthrough as the lowest social welfare payment for a single person has been benchmarked at 30% of gross average industrial earnings (GAIE). By raising the lowest rate by €20 a week the Government honoured the commitment, Save it made in its National Anti-Poverty Strategy.

The Budget also made significant progress in addressing the social exclusion experienced by vulnerable groups such as older people and children and those in need in areas such as disability, mental health, caring and social housing.

On the downside, the Budget’s reduction of the top tax rate by 1% to 41% was not the fairest use of the available money. The failure to provide substantial additional funding to community and voluntary organisations providing services in local areas was also disappointing as was the failure to improve the access to medical cards.

Pluses Benchmarking social welfare. Initiatives for older people. Initiatives on disability and mental health. Social housing allocation. An additional 100 primary care teams. Minuses Reducing the top tax rate. Failure to provide additional funding for community and voluntary organisations providing local services. No improvement in medical card situation.

Ireland has been changing dramatically. Economic growth and very significant job creation have transformed the country since the early 1990s. However, problems persist. Not everyone has benefited from the economic growth. Growing incomes have not led directly to increased well-being for all those who are better-off. This Budget goes some way towards addressing the challenges presented by social exclusion.

Social Welfare Rates

The increases in the lowest social welfare rates will have a positive impact on those who are at risk of poverty. 60% of these are people living in households headed by a person who is not in the labour force i.e. they are elderly, ill, have a disability or are carers. This increase should also help to continue the decline in the (too high) level of risk of poverty which has been evident in the last two years. (cf. p.3)

Older People

The increase in the allocation for care services for older people is very welcome. So too are the increases in the State Pension and related social welfare developments. The funding of an additional 2,000 home care packages is substantial. We welcome the community-based focus of these initiatives and look forward to hearing the details when they are announced.

Significant progress on social inclusion

Children

A number of Budget initiatives addressed child poverty. Action in this area is urgently required as 22% of all children live in households that are at risk of poverty. The increases in child benefit, in the qualified child allowance and in family income supplement (FIS) as well as the other initiatives on children will have a positive impact.

However it is important to note that a more comprehensive and integrated approach to child poverty and child care will be required if there is to be a major reduction in child poverty. CORI Justice urges Government to introduce a refundable tax credit available for all children irrespective of the labour force status of their parents. (cf. pg 7 for more details on this proposal.)

Social housing

The allocation for social housing is very significant. It provides the resources required in 2007 to honour the commitment made in Towards 2016 to provide an additional 27,000 social housing units in the period 2007-9.

The most recent assessment of local authority waiting lists found there was a total of 43,684 households on local-authority housing waiting lists. This figure represents a decrease of 9.8 per cent since 2002. 73,000 additional social housing units will be required if the social housing shortage is to be addressed by 2013. This allocation is a significant contribution to tackling this problem.

Primary Care

The allocation to provide an additional 100 primary care teams honours the commitment in Towards 2016 and doubles the number of these teams. To ensure appropriate services are delivered the composition of these teams needs to be based on Local Needs Assessment.

Disability

We welcome the continued roll-out of the National Disability Strategy and the multi-annual investment programme announced in Budget 2005.

Tax changes

Reducing the top tax rate was not the fairest or the best option. For the same cost to the exchequer every person could have been given a tax credit of €90. This would have been a much fairer use of the available money. The only people to have a net gain from this Government initiative were people earning more than €43,000 a year and couples (both employed) earning more than €86,000. (cf. pg 6 for details.)

The changes in the administrative procedures to make it easier for tax payers to claim their reliefs and the review of VRT in relation to CO2 emissions are a step in the right direction.

Medical Cards

We regret the failure to raise the eligibility threshold for medical cards. What is required is full medical card coverage for all vulnerable people in Ireland. This should have been addressed given the resources that are available.

Funding C&V organisations

The failure to provide substantial additional direct funding for community and voluntary organisations that provide services in local communities across the country is most disappointing. Many of these organisations developed their services through the Community Employment (CE) programme. Now that unemployment and CE are much lower the capacity of these organisations has been dramatically reduced.

Additional funding was required. It has not been provided. The end result will be a reduction in the work being done by these organisations.

On Tobacco and Inflation

In his Budget speech the Minister for Finance asked that Social Partners agree to discount some or all of the effect of increases in tobacco excises in fixing the relevant inflation benchmark. Tobacco is one of the biggest contributors to ill-health in Ireland.

The excise increases on tobacco are a health promotion measure. As a Social Partner CORI Justice is glad to respond positively to the Minister’s request and we would be glad to discount all of the effect of these increases.

Conclusion

We strongly support the Minister for Finance when he emphasises the importance of the common good. This Budget has taken significant steps in the right direction. There is much that remains to be done, however. Government budgets in the years ahead should focus on building a fairer and more inclusive society where social provision and infrastructure are at a level of which we can be proud.

Government budgets in the years ahead should focus on building a fairer and more inclusive society with appropriate infrastructure and social provision.

Social Welfare Target Reached

Budget 2007’s decision to deliver an increase of €20 per week to the minimum social welfare rates marks a fundamental turning point in Irish public policy. This is the third budget in a row where the government has delivered on its National Anti-Poverty Strategy (NAPS) commitment.

In doing so the government has moved to meet the target it set in that strategy to increase the minimum level of unemployment assistance to “a rate of €150 per week in 2002 terms for the lowest rates of social welfare to be met by 2007”.

In 2007 the minimum social welfare rate will increase to €185.80 per week; a figure equivalent to the 30% of Gross Average Industrial Earnings (GAIE).

This increase marks a fundamental turning point in Irish public policy...and underscores the emergence of a long overdue commitment to sharing the fruits of this country’s recent economic success

Four years ago, CORI Justice set out a three-year pathway to reaching this target by calculating the projected growth in €150 between 2002 and 2007 when it is indexed to the estimated growth in GAIE (detailed calculations are presented on pages 49-51 of our Socio Economic Review, Developing a Fairer Ireland).

CORI Justice warmly welcomes this achievement. It marks major progress and underscores the emergence of a long overdue commitment to sharing the fruits of this country’s recent economic success. We look forward to seeing this commitment continuing in the years to come through the sustained benchmarking of social welfare rates at 30% of Gross Average Industrial Earnings.

Table 1: Benchmarking Social Welfare: Reaching the NAPS Target, 2004-2007
	2004	2005	2006	2007
Min. SW. payment in €’s	134.8	148.8	165.8	185.8
€ amount increase each year	-	14	17	20
Delivered		y	y	y

Maintaining the Benchmark: SW rates from 2008-2010

A central objective of CORI Justice has been to develop a fairer Ireland. As the economy has boomed over much of the last fifteen years we have continually pointed out that many have been left behind. In particular, those dependent on state welfare payments have seen their incomes rise at a considerably slower pace than that of the rest of society.

As a means of addressing this, CORI Justice has given a lot of attention to the need to increase pensions and social welfare payments. In that context, an important aspect of the NAPS social welfare commitment has been to acknowledge that the years from 2002-2007 marked a period of ‘catch-up’ for those in receipt of welfare payments.

Now that this income gap has been bridged, the increases necessary to keep social welfare payments at a level equivalent to 30 per cent of GAIE become much smaller.

Reflecting the current budgetary process these future social welfare increase have been calculated, and revised, over a period of three years

To make this point, CORI Justice has calculated the increases necessary from Budget 2008 (delivered next year in December 2007) onwards to 2010 to maintain the link with 30 per cent of GAIE. Reflecting the current budgetary process these increase have been calculated, and revised, over a period of three years.

The table below shows the increases required over the period from 2008-2010 calculated using ESRI projections of increases in average industrial earnings. These suggest an average annual increase of €10.10 over these three years. The Budget 2008 increase of €13.20 per week will cost the government approximately €350m less than it has spent on social welfare in Budget 2007 (see pages 7 & 20 for proposals on how this saving should be used).

Table 2: Future Increases in Minimum Social Welfare Payments, 2008-2010
	2007	2008	2009	2010
30% of GAIE updated	185.5	199	206.5	216
€ amount increase each year	-	13.2	7.5	9.5

Chart 1: Income Distribution and Budget 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes: * Except in LTU case where there is no earner ** LTU: Long Term Unemployed Couple with 2 earners are assumed to have equal shares of income.

Table 3: Effective Tax Rates following Budget 2007
Income Level	Single Person	Couple 1 Earner	Couple 2 Earners
15000	0%	0%	0%
25000	10.90%	4.90%	0%
30000	13.40%	5.10%	1.70%
40000	19.70%	10.20%	5.60%
60000	28.10%	20.80%	12.70%
80000	31.90%	25.10%	18.70%
100000	34.20%	29.70%	24.60%
120000	35.70%	32.00%	27.90%

Chart 2: Effective Tax Rates in Ireland, 1997-2007

 

 

 

 

 

 

 

 

 

 

How Much Better Off Will People Be In 2007?

When assessing how much better off people are going to be in 2007 it is important that wage increases and tax changes be included as well as social welfare increases. Unemployed people, for example, gain nothing from wage increases or tax reductions while those with jobs may gain from both. In our calculations we have included the general wage increase in various national agreements as well as the impact of Budget changes on social welfare and taxation.

We have not included the impact of any future benchmarking increases for public servants, as they do not apply to everyone.

Single people who are long-term unemployed will be €20.00 a week (€1,044 a year) better off in 2007. Those on €25,000 a year will be €24.68 a week (€1,288 a year) better off while those on €50,000 will be €43.69 a week (€2,280 a year ) better off in the coming year.

Couples who are long-term unemployed will be €33.30 a week (€1,738 a year) better off. Couples with one income on €25,000 a year will be €26.41 a week (€1,378 a year) better off while those on €50,000 will be €44.46 a week (€2,320 a year) better off in the coming year.

Couples with two incomes on €25,000 a year will be € 21.62 a week (€1,128 a year) better off while those on €50,000 will be €49.52 a week (€2,584 a year) better off in the coming year.

The impact of Budget 2007 on the distribution of income in Ireland can be further assessed by examining the rich-poor gap. This measures the gap between the disposable income of a single person on long-term unemployment and a single person on €50,000 per annum. Budget 2007 has widened the rich-poor gap by €23.69 per week

Effective Tax Rates after Budget 2007

Central to the ongoing debate on taxation in Ireland are effective tax rates. These rates as calculated by comparing the total amount of income tax a person pays with their pre-tax income. For example, a person earning €50,000 who pays €10,000 in taxation will have an effective tax rate of 20 per cent. Calculating the scale of income taxation in this way provides a more accurate reflection of the burden of income taxation faced by earners.

Following Budget 2007 we have calculated effective tax rates for a single person, a single income couple and a couple both earners. Table 3 (page 4) presents the results of this analysis.

For a single person with an income of €15,000 the effective tax rate will be 0%, rising to 10.9% of an income of €25,000 and 35.7% of an income of €120,000. A single income couple will have an effective tax rate of 0% at an income of €15,000, rising to 4.9% at an income of €25,000, 20.8% at an income of €60,000 and 32.0% at an income of €120,000.

Effective tax rates provide a more accurate reflection of the burden of income taxation faced by earners.

In the case of a couple where both are earning where their combined income is €40,000 their effective tax rate is 5.6%, rising to 27.9% for combined earnings of €120,000.

As chart 2 (page 4) shows these effective tax rates have decreased considerably over the past decade for all earners. For example, in 1997 a couple with two earners on an income of €60,000 had an effective tax rate of 36.6%. This fell to 19.3% in 2002 and will fall to 12.7% after this budget.

The Budget and the Poor

Despite the advances in employment and economic growth achieved over the last few years, the proportion of the population at risk of poverty remains large. Its sustained existence challenges many of the improvements of recent years.

The most up-to-date data available on the nature and extent of poverty in Ireland comes from the 2005 EU-SILC (Survey on Income and Living Conditions) results published by the Central Statistics Office in mid-November. Its results showed that 18.5% of the Irish population is at risk of poverty—a decline for the second year in a row.

In financial terms this means that almost one in five of the population lives with incomes equivalent to less than €203 a week for a single person in 2006 terms.

It is useful to translate the poverty percentages into numbers of people. The latest poverty figures indicate that in 2005 approximately 740,000 people were at risk of poverty. Of these, approximately 190,000 were children, implying that 22 out of every 100 Irish children live in a household that is at risk of poverty.

The groups at highest risk of poverty are: those who are ill/disabled, single parents, those who rent and those who are unemployed. A large proportion of these groups depends on social welfare payments and that fact underscores our earlier call over recent years to increase welfare payments in line with Gross Average Industrial Earnings. The recent poverty figures also highlighted that non-Irish people record a poverty risk twice that of Irish people. Future policy will needs to address this issue.

Budget 2007 has made a number of welcome steps towards addressing the experiences of many of these groups. However, more progress need to be made in the years to come.

Top Tax Rate Cut not the Fairest Option

CORI Justice has for some time highlighted the need for fairness to apply in the taxation system. A central element of this view stresses that when decisions are being made on tax changes, the impact that they will have across society is considered.

In that regard, Budget 2007’s decision to decrease the top tax rate by 1% is an unfortunate choice. As we have shown below, for the same exchequer cost (approximately €186m in a full year) the Minister for Finance could have increased tax credits for all workers by €90 per annum.

only single people earning more than €43,000 and couples earning more than €86,000 gain from the top rate tax cut

Comparing the outcome of such a choice, with the decision taken in the Budget to reduce the top tax rate, we see that Government’s choice gave no net gain to people with incomes below €43,000. However, it provided a gain of €460 for a person on €80,000 a year. This is a redistribution in favour of the better off.

Where resources are available for tax cuts, these should be used to promote fairness in society. An additional increase in tax credits of €90 for each taxpayer would have been a far fairer budgetary choice

Two tax changes with the same exchequer costs As part of the Budgetary process, the Department of Finance issues a set of figures which estimate the costs of various tax changes. This document, has been used, in conjunction with the budget documents, to perform the calculation presented. The full year cost of a €90 increase in tax credits for all taxpayers = €185m. The full year cost of a 1% reduction in the top tax rate = €186m (post-Budget 2007) While both tax changes have the same exchequer cost, they have very different distributive outcomes.

Chart 3: Comparison between a 1% cut in the top tax rate and an increase in tax credits of €90 for each taxpayer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Environmental Taxes

We welcome the Minister’s announcement that he plans to reform Vehicle Registration Tax (VRT) and motor tax. As we pointed out in our pre-Budget document, Budget Choices, the difficulties associated with fuel prices, infrastructural capacity difficulties and pollution levels in excess of Kyoto limits, suggest that the time is now right to radically reform the structure of these taxes. Reflecting the principle of the “polluter pays” we believe that these taxes should be substantially raised on all private cars at or in excess of an engine capacity of 2,000cc. Simultaneously, taxes should decrease on environmentally friendlier cars.

During 2007, the Minister plans to establish a consultative process which will consider the nature of these changes. CORI Justice looks forward to contributing to this process.

Other Tax Changes

Two further reforms in the taxation area announced in the Budget are worth mentioning.

First, we welcome a number of reforms announced by the Minister which are intended to simplify the taxation system. The changes in the administrative procedures, as announced, will make it easier for taxpayers to claim their reliefs. These developments mark an important step toward building a more accessible taxation system. We hope that this development marks the start of an ongoing process.

We also welcome the decision by the minister to increase taxation levels on earnings in excess of €100,000 per annum. The decision to increase the health levy on these high earners, from 2% to 2.5%, will provide an additional €34 million in revenue for the exchequer.

Irish Total Government Spending in an EU context

Many of the comments recently voiced with regard to levels of state spending in Ireland have suggested that Irish government expenditure has become too high. Associated with these views have been suggestions that expenditure levels should be scaled back.

CORI Justice has recently pointed out that its more than ironic that government used to claim it could not spend money on socio-economic priorities because it did not have it; and now when it has the resources it is deemed economically inappropriate to spend money to adequately address these problems.

Table 4: Total Government Expenditure as a % of GDP
Country	% GDP
Sweden	56.4
France	53.8
EU-25 average	47.2
Germany	46.8
UK	44.7
IRELAND (GNP)	40.5
Spain	38.2
IRELAND (GDP)	34.1
Estonia	33.2

In that context, it is worthwhile examining levels of government expenditure in an EU context. The most recent figures from Eurostat, the EU’s statistical agency, report the total expenditure by governments across the EU-25 in 2005 (Europe in Figures). Table 4 reports this data for a selection of these countries. As it shows, total Irish government expenditure is considerably below the EU average. Only Spain, Slovakia, Latvia, Lithuania and Estonia record lower levels of government expenditure.

It remains a myth that Irish government spending is too high.

Overseas Development Assistance: 2007 Target Met

CORI Justice warmly welcomes the Budget allocation of €813m to overseas development assistance (ODA). This reflects an increase of €155m over the allocation in 2006.

Despite a number of previously missed targets, CORI Justice welcomed the recent announcement by the Taoiseach that Ireland will reach the UN target of 0.7% of GNP on overseas aid by 2012. We also welcome the re-iteration of this commitment in Towards 2016 and in the Government White Paper on Irish Aid.

As part of reaching that target the government set out two interim targets. The first of these, to reach an ODA level equivalent to 0.5% of GNP by 2007, was met by the Minister in Budget 2007. We look forward to seeing continued progress being made towards reaching the second interim target of 0.6% by 2010.

Ireland has a responsibility to allocate a proportion of its significant annual resources to assisting those in the developing world. It is important that the Government and Irish society generally support the scale of these ODA allocations.

We also welcome the allocation of an increasing proportion of these funds towards assisting the fight against HIV/AIDS in developing countries.

Table 5: ODA Funding and Targets
Year	ODA Commitment	% GNP
2006	€658m	0.466% of GNP
2007	€813m	0.5% of GNP
2010	-	0.6% of GNP
2012	-	0.7% of GNP

Children—introduce a refundable tax credit for all

There are major problems in Ireland with child poverty and childcare. There are constant claims that not enough is being done by Government on either front. To address this issue in an integrated manner CORI Justice has proposed that Government introduce a refundable tax credit available for every child irrespective of the employment status of their parents.

The vast majority of people would add the tax credit to their already-existing tax credits thus reducing their tax payment by the amount of the child credit. Only those on social welfare or in very low-paid employment would claim the payment directly.

The level at which the payment could be set would depend on the resources available. If, for example, Government had decided in Budget 2007 to turn the early childcare supplement of €1,000 a year introduced in last year’s Budget into a refundable tax credit then every child under 6 would have become eligible for a payment in the region of €5,000 without increasing Government expenditure (based on the expectation that the payment would be collected directly for only 1 out of every 5 children—the other four receiving it through the tax system).

This payment would be effective in targeting child poverty among those on low incomes and would improve support for childcare significantly.

Government’s tax-take would be reduced while Government expenditure would not increase - both developments seen as positive by many commentators.

CORI Justice urges Government to introduce a refundable tax credit for all children along these lines.

Government's Current Budget for 2007

2007 Post-Budget €m
CURRENT EXPENDITURE
Service of National Debt
Interest	1,984
Sinking Funds	459
Other debt management expenses	57
EU Budget Contribution	1,684
Economic Services
Industry and Labour	1,489
Agriculture	1,427
Fisheries, Forestry	172
Tourism	204
Social Services
Health	13,841
Education	7,898
Social Welfare	15,774
Housing, Subsidies, etc.	527
Security	3,181
Other	4,224
Gross Current Expenditure	52,921
less Appropriations in-aid and SIF expenditure	11,301
less Departmental Balances	30
Net Current Expenditure (a)	41,590
CURRENT RECEIPTS
Tax Revenue
Customs	285
Excise Duties	6,069
Capital Gains Tax	3,345
Capital Acquistions Tax	375
Stamp Duties	3,925
Income Tax	13,555
Corporation Tax	6,650
Value Added Tax	14,870
Agricultural Levies	1
Non-Tax Revenue
Central Bank Surplus	115
National Lottery Surplus	200
Interest on Loans and Dividends	84
Issue of Coin	30
Other Receipts	136
Total Current Receipts (b)	49,640
CURRENT BUDGET BALANCE [(b) - (a)]	8,050

Taxation

Our Submission Asked that the Budget :

• Standard rate all discretionary tax expenditures.
• Continue to review the costs and benefits of discretionary tax expenditures.
• Introduce a speculative tax on windfall gains from land rezoning.
• Make tax credits refundable.
• Adjust tax credits so as to keep the minimum wage out of the tax net.
• Move towards having a refundable tax credit available for all children irrespective of the labour-force status of their parents.
• Proceed with individualisation in the income tax system in a fair and equitable manner.
• Poverty-proof all budget tax packages to ensure they do not further widen the rich/poor gap.
• Commit to increasing Ireland’s total tax take towards the EU average.
• Increase capital gains tax.
• Move decisively to shift the burden of taxation from income tax to eco-taxes and taxes on consumption.
• Increase corporate tax rate to 17.5%.
• Reform the structure of motor tax by substantially raising motor taxes on all private cars at or in excess of an engine capacity of 2,000 c.c.
• Expand the levy on financial institutions introduced in Budget 2003
• Investigate policies which allow taxation on wealth and land to be increased.

The Budget

INCOME TAX

• Employee Tax Credit increased by €270 to €1,760.
• Personal Credits increased by €130 single and €260 married.
• Tax exemption for people aged over 65 increased by €2,000 single and €4,000 married.
• Standard Rate Tax band increased by €2,000 single, married one income and lone parent and €4,000 married two incomes.
• Higher rate reduced to 41%.
• Maximum level of rent paid for private rented accommodation on which tax relief can be claimed increased to €1,800 single and €3,600 married person under 55 and €3,600 and €7,200 over 55.
• Child-minding tax relief increased to €15,000 where individual minds up to three children in own home.
• Tax exemption of unemployment benefit to systemic short-term workers extended indefinitely.
• Mortgage interest relief for first time buyers increased to €8,000 for single and €16,000 married.
• Mortgage interest relief for non-first time buyers increased to €5,080 single and €6,000 married.
• Increase in Rate for Preferential Home Loans from 3.5% to 4.5% and in respect of other loans from 11% to 12%.
• Employee PRSI annual ceiling increased to €48,800.
• Employee PRSI weekly threshold increased to €339.
• Health Levy threshold increased to €480 weekly.
• Health Levy rate increased to 2.5% for earnings in excess of €100,100 per annum.
• Administrative changes being introduced to make it easier for taxpayers claim reliefs to which they are entitled.

FARMER TAXATION

• Amendments to the education criteria in respect of exemption from stamp duty on transfer of land to young trained farmer.
• Stamp duty relief extended in respect of exchanges of farmland for the purpose of consolidation.
• Farmers VAT Flat-rate addition increased from 4.8% to 5.2%.
• Tax exemption of €20,000 for income derived from leases of farmland for 10 years or more.

CAPITAL ALLOWANCES & TAX INCENTIVES

• Car value threshold for business cars increased to €24,000.
• Qualifying period for tax relief for corporate investment in renewable energy projects extended to 2011.

CORPORATION TAX

• Tax credit of 20% in respect of research and development expenditure extended for three years.
• Corporation tax liability threshold of small companies increased to €150,000.

VAT & EXCISES

• VAT registration thresholds for small businesses being increased to €35,000 in the case of services and €70,000 in the case of goods.
• Excise Duty on kerosene and LPG for home heating reduced to zero.
• Excise duty increased on a packet of 20 cigarettes by 50 cent.
• VRT relief of 50% for vehicles operating on a rechargeable battery.
• Public consultation being undertaken to change the VRT system to take account of CO2 emissions.
• VAT cash accounting threshold for small firms increased to €1m.
• VAT relief introduced for conference-related accommodation.
• VAT on child car seats reduced to 13.5%.
• Public consultation to be undertaken re property transactions.

Social Welfare

Our Submission Asked that the Budget :

• Provide a fair income distribution between people on different incomes. To achieve this the combined impact of the tax and social welfare packages should favour those on low incomes whether they depend on social welfare or are in low-paid employment.
• Increase the lowest social welfare rates by €20 a week for a single person.
• Commit Government to continue benchmarking the lowest social welfare payments for single people at 30% of gross average industrial earnings.
• Adopt policies to address child poverty and childcare. This could, for example, be done in an integrated way by changing the early childcare supplement scheme introduced in Budget 2006 into a refundable tax credit and increasing it substantially.
• Increase child benefit substantially and do not tax it.
• Move towards individualisation of social welfare payments.
• Introduce a cost of disability allowance.
• Increase the weekly allowance for asylum seekers in ‘direct provision’ to €60 a week for an adult and €30 for a child.
• Develop a national programme, on an inter-departmental basis, to address fuel poverty.
• Abolish claw-back rules so that social welfare recipients will get the full value of the Budget increases.
• Update tax credits so as to keep the minimum wage out of the tax net.

The Budget

Provided Total Social Welfare improvements costing €1.4 billion in a full year.

PERSONAL RATES (weekly )

• State Pensions:+€16 (contributory) and + €18 (non-contributory).
• + €20 for all others on lower rates.

QUALIFIED ADULT ALLOWANCES (weekly increase)

• +€12.40 State Pension, 66 and over (contributory)
• + €10.70 Pension (contributory) and Transition, under 66
• +€11.90 Non contributory Pension
• + €14.30 Invalidity Pension, < 66
• • + €13.30 for other QAA payments

CHILD AND FAMILY INCOME

• €10 monthly increase per child in Child Benefit Child Dependent Allowance increased to a single higher rate of €22 per week
• FIS income thresholds increase ranging from €15 to €185 per week
• Back to School Clothing and Footwear Allowance increased by €60(2 – 11 years) and by €95 (aged 12 to, where appropriate, 22 years)
• Free Fuel Allowance weekly increase of €4 to €18 and the weekly eligibility threshold raised from €51 to €100
• One-Parent Family +€22.70 and the earning threshold up to €400
• Earning threshold for Maternity Benefit increased to €350

CARERS INCREASES

• Respite Care Grant €300 increase
• Weekly income disregard in the Carer’s Allowance Scheme - €30 (single) and €60 (couples)

Our Response

• We applaud the €20 increase in lower Social Welfare rates. This brings the lowest social welfare rates to 30% of GAIE and meets the government’s NAPS target.

We warmly welcome the following:

• State Pension increases of €16 (contributory) and €18 (non- contributory)
• Improvements in QAA rates
• FIS income threshold increase

We recognise that while these increases are positive developments they still do not allow for current increases in the cost of living.

While we recognise the increase in the Child Dependent Allowance we propose a more ambitious approach to tackling child poverty and childcare in an integrated manner - cf page 7 for details.

We regret the:

• Limited increases in Child Benefit and Back to School Allowance. These increases do not in fact meet the expenditure needs of households with adolescents
• Failure to convert the early childhood supplement scheme into a refundable tax credit
• Insufficient increase in the Fuel Allowance which will not keep pace with escalating energy costs
• Failure to increase the weekly allowance for asylum seekers in direct provision to €60 euro per week and €30 euro for a child.
• Reluctance to address the problem of poverty traps / claw-back rules which negatively impact on secondary benefits.
• Missed opportunity to individualise social welfare payments.

Work/Unemployment/Job Creation

Our Submission Asked that the Budget :

• Place an ongoing emphasis on preparing and enabling unemployed people to access jobs. This would involve providing additional resources to support:
• Increased numbers of places providing quality education and training, retraining and up-skilling.
• Expanded opportunities for unemployed people to gain work-place experience.
• Adequate numbers of places on programmes such as Community Employment.
• Increase the education/training grants for participants in active labour market programmes.
• Resource life long learning.
• Develop a targeted programme focused on providing real work opportunities for those who are furthest from the labour market e.g. people over 35 who have been unemployed for more than 5 years. [The Job Initiative - JI - programme was developed to provide this group with real work opportunities. Now that JI is being ended by Government a meaningful alternative programme is required.]
• Recognise the right to work of asylum seekers.
• Provide resources to conduct a survey to discover the value of all unpaid work in the country.
• Allocate resources to address the youth unemployment problem.
• Maintain the number of active labour market places for long-term unemployed people.

The Budget

• Increased the gross budget to the Department of Enterprise, Trade & Employment by 5% (€75.3m) to €1.47billion and the National Training Fund by 10% (€36.8m) to €392.4m.
• Increased the allocation to the Science and Technology Programme by 12% (€31m) to €289.8m.
• Increased the grant to FORFAS by 11% (€3.5m) and to INTERTRADE Ireland by 28% (€2.6m) to €11.9m.
• Increased the IDA grants to Industry by 13% (€11m) to €95m, the grant to Enterprise Ireland by 5% (€5m) to €98.8m, the allocation to Enterprise Ireland Grants to Industry by 2% (€1.1m) to €54.1m.
• Increased the grant to County Enterprise Development by 5% (€1.4m) to €31.9m.
• Increased the grant to FAS administration by 5% (€6.6m) to €147.6m.
• Increased the allocation to FAS Training & Integration Supports by 7% (€5.9m) to €83.9m. This includes €72m for programmes designed to enhance the employment of people with disabilities (an increase of 6%).
• Increased the grant to FAS Employment Programmes by 3% (€9.6m) to €385.9m.
• A commitment of €11.2m was made towards the establishment of the Office of the Director for Employment Rights Compliance in 2007.
• Increased the allocation to Consumer Affairs by 15% (€1.1m) to €8.4m.

Our Response

• We welcome the increased allocation to the National Training Fund and to the Science and Technology Programme. These are steps in the right direction as they are aimed at improving the skills of Ireland’s labour force and strengthening the research and development component of economic development.
• We welcome the increased allocation for training and integration supports and are particularly glad to see the increase for programmes aimed at enhancing the employment of people with disabilities. This is an essential component of delivering an effective life-cycle approach to the development of social policy outlined in Towards 2016.
• We also welcome the allocation for the establishment of the Office of the Director for Employment Rights Compliance. This meets a key commitment contained in Towards 2016 and is a central component of an effective response to the dangers of a ‘race to the bottom’ that have been a major concern of workers in a number of industries for some years.
• Of major concern is the need to address the value of all work and not just paid employment. Many people do good work in the home, in the community, in the wider society without receiving any payment. The economic value of such work tends to be ignored. It is not included in measurements of GNP or GDP. Because its monetary value is not recognised its value tends to be ignored or down-played. The value of such work needs to be recognised, quantified and included in economic calculations as well as in measurements of people’s and society’s wellbeing.
• We are disappointed that the right to work of asylum seekers was not addressed.

Public Services

Our Submission Asked that the Budget :

• Target funding strategies to ensure that far greater priority is given to providing an easy-access, affordable and high quality public transport system.
• Increase the provision of open-access information technology in public libraries and meet the commitment in the national agreement to include everybody in the information society.
• Introduce a system (e.g. a swipe card) that ensures people on low incomes can access information communications technology on an ongoing basis.
• Adopt further information technology programmes to increase the skills of school children, early school-leavers and the unemployed.
• Increase the allocation for services for Irish emigrants.
• Take initiatives to ensure equality of access across all public services.
• Provide sufficient resources for the CSO to ensure it can collect the required data to underpin evidence-based policy development.
• Regulate the removal of public payphone services. This is essential for poor areas and rural areas where the revenue generated by a pay-phone can give a misleading interpretation of its significance in the community.
• Provide additional funding to the Sports Partnership initiative.
• Provide sufficient resources to the Central Statistics Office (CSO) to ensure they can provide the relevant data to underpin evidence-based policy development.

The Budget

Transport and Communications

• Increased the allocation to the Public Transport Investment Programme by 58% (€285.6m) to €777m and
  to Communications by 42% (€15.6m) to €52.9m, mostly for the development of broadband.

Sport

• Increased the budget for Sport & Recreation Services by 29% (€67m) to €296m. Within this budget increased the grant to i) the Sports Council by 20% (€8m) to €49m; ii) Sports Campus Ireland by 198% (€21m) to €32m; iii)
• Lansdowne Road by 280% (€56m) to €76m; iv) Horse and Greyhound Racing by 2% (€1.8m) to €71.8m.
• Added a stamp duty exemption for sporting bodies purchasing land for the purpose of promoting sports

Equality

• Allocated €22.2m to equality issues. Within this budget increased the grant to i) Gender mainstreaming by 16% (€1m) to €7.9m; ii) Violence against Women by 32% (€529,000) to €2.2m; iii) Equality proofing by 540% (€0.5m) to €595,000.
• Reduced the allocation to Asylum by 4% (€6m) to €136.5m.
• Increased the allocation to Disability by 11% (€1.4m) to €13.4m
• Increased the grant to the Legal Aid Board by 6% (€1.4m) to €23.3m.

Irish Emigrants

• Increased the grant for the support of Irish Emigrants Services by 27% (€3.2m) to €15.2m.

Our Response

• We welcome the 58pc increase in the public transport investment programme.This indicates a commitment to advance the capital programme and Transport 21 which is necessary to secure balanced regional development.
• We also welcome the allocation to equality issues. We look forward to Government providing the necessary resources for the forthcoming National Women’s Strategy which should be of a scale to have a major impact on securing gender equality in the years ahead.
• The failure to ensure that broadband would be available across the whole country in the coming year is disappointing. A recent report from Eurostat shows that households and businesses in Ireland continue to have one of the lowest levels of broadband connection in the EU. The proportion of households with a broadband connection in 2006 was highest in the Netherlands (66%), Denmark (63%) and Finland (53%) and lowest in Greece (4%), Slovakia (11%), Cyprus (12%) and Ireland (13%).
• While we welcome the increased budget for sport we question the value of allocating €71.8 million to horse and greyhound racing. This amounts to a subsidy of about €40 for every person attending a horse or greyhound meeting. This subsidy would be much better spent funding the development and expansion of local sports partnerships promoted by the Sports Council and which are open to people irrespective of their means.
• We regret the reduction in the allocation for the asylum process. While we recognize that the numbers have reduced we would have hoped that the money would be retained in the budget to expedite the asylum process.

Community & Rural Development

Our Submission Asked that the Budget :

• Ensure the Budget should take particular account of rural disadvantage.
• Expand the programme providing direct funding for community and voluntary organisations that provide services which was initiated in Budget 2005 and do not make this funding dependent on C+V organisations employing people who do not have the requisite skills.
• Reform and adequately resource the Social Economy programme to ensure it has a real social economy focus.
• Provide additional resources for rural housing and for the development of rural public transport strategies and initiatives tailored to meet the needs of people in local communities.
• Support policies that encourage alternative farm enterprises through the promotion of quality (including organic) food production and processing and support programmes to create employment for part-time farmers with a view to effectively targeting the needs of smaller farmers.
• Support additional special outreach education programmes in rural areas, particularly those where no major third level colleges are located.
• Double the number of places on the rural social scheme and make it available to people without herd numbers.
• Reverse the trend of centralising services away from local communities in areas such as healthcare, education, post offices, etc.
• Adequately resource the Local and Regional Drugs Task Forces.

The Budget

• Increased the overall gross budget to the Department of Community, Rural and Gaeltacht Affairs by 2% (€8.6m) to €487m. Within this budget increased the allocation to Rural Affairs by 4% (€3.5m) to €102.7m and to Community Affairs by 8% (€17.3m) to €225m.
• Increased the grants for the Community & Voluntary Programme by 130% (€15m) to €26.5m.
• Increased the grant Community Services Programme by 24% (€10m) to €52m.
• Increased the grant to Local & Community Development Programme by 10% (€7m) to €81.5m.
• Increased the grant to the Western Development Commission by 13% (295,000) to €2.5m and maintained the Western Development fund at €4m.
• Maintained the allocation for the Rural Social Scheme at its present level.
• Increased the grant to Cultural & Social Schemes by 18% (€1.5) to €9.85 m.
• Increased the grant to the Rural Transport Initiative by 80% (€4m) to €9m.
• Allocated €328m in 2007 for the new REPS4 Scheme to include additional biodiversity elements and measures to improve water quality.
• Increased the Income Supports for disadvantaged rural areas by 8% (€18.6m) to €257m.
• Renewed and extended certain farm reliefs and tax exemptions.
• Increased the farmers flat rate of VAT to 5.2% to assist not VAT registered farmers for the VAT they pay.

Our Response

• We welcome the increased allocation to the three community programmes and to the Western Development Commission.
• We also welcome the increased allocation for the rural transport initiative which is crucial to ensuring local participation by many people who would otherwise be excluded.
• We regret that no increased allocation was made to the Rural Social Scheme
• We regret that no real steps have been taken in the Budget to support the real development of rural communities
• The failure to provide substantial additional direct funding for community and voluntary organisations that provide services in local communities across the country is most disappointing. Many of these organisations developed their services through employing people from the live register through the Community Employment programme. Now that unemployment is at a much lower level and the number of people on CE has fallen from 40,000 to about 20,000 the capacity of these organisations has been dramatically reduced. Additional funding was required.
• Rural Ireland is in transition from an agricultural to a rural development agenda. Action should be focused on issues such as implementing the National Spatial Strategy to secure a more balanced distribution of population and economic activity throughout the country. It requires development of rapid communications and supporting infrastructure in all parts of the country.

Environment

Our Submission Asked that the Budget :

• Allocate the necessary resources to achieve waste reduction targets by implementing the relevant sections of the Waste Management Act.
• Allocate substantial additional resources to develop and reward recycling.
• Provide additional resources to ensure that water pollution is reduced.
• Undertake to review the water pollution acts so as to increase the penalties associated with water pollution. (It remains a concern that over 30% of Ireland’s river channels are classified as polluted to some extent).
• Reverse the decision to abandon carbon taxation and introduce a coherent series of initiatives aimed at reducing dependence on oil, gas, coal and other fossil fuels.
• Introduce public purchasing policies that encourage contractors to adopt sustainable practices.
• Resource the development of ‘satellite’ national accounts that include the costs of items such as environmental damage and resource consumption, and the value of a range of traditionally ‘uncounted’ items such as unpaid work.
• Target funding strategies in the transport area to ensure far greater priority is given to public transport initiatives.
• Provide substantial additional resources for the development of library services throughout the country.

The Budget

• Allocated an additional €270m. to fund the purchase of carbon credit allowances up to 2013 to
  off-set failure to meet Kyoto Agreement commitments
• Announced changes in Vehicle Registration Tax to financially reward those choosing vehicles
  with lower carbon dioxide emissions, with effect from 1 January 2008. There will be consultation on a complementary rebalancing of annual motor tax, following a new mandatory labeling system for cars based on C02 emission levels.
• Increased funding to certain alternative energy schemes.
• Provided an additional €3m to Sustainable Energy Ireland to support pilot programmes for SMEs
• Announced grant aid for production of energy crops, in three phases.
• Increased the grant to the Local Government Fund by 2% (€8.5m) to €527m.
• Increased the grant to Community & Social Inclusion by 5% (€462,000) to €10.68m.
• Increased the grant to Library Services by 11% (€1.4m) to €13.68m
• Increased the allocation to National Parks & Wildlife by 11% (€3.8m) to €38.5m
• Increased the allocation to the Environmental Protection Agency by 49% (€7.6m) to €23.3m.
• Increased the allocation to the Climate Change Fund by 2% (€63,000m) to €2.8m.
• Increased the allocation to Water & Sewerage services by 7% (€27.7m) to €426.7m.
• Allocated €77m to improvement of non-national roads. (increase of 2%)

Our Response

• We regret that so much of the resources given to promotion of a better environment are given to the purchase of carbon credits rather than to meeting our Kyoto commitments through reduction of carbon emissions..
• We welcome the introduction of positive measures to award the use of vehicles with low carbon emissions.
• We welcome measures to support the provision of renewable energy, but regret absence of incentives to address pollution and waste.
• We welcome the increased allocation for environment-related issues. These are welcome steps on a long road that remains to be traveled if environment is to be given the priority it requires in policy development.
• We also welcome the increased allocation to library services. Libraries are important institutions in local communities and provide a vital resource in promotion of local development.
• We regret that the Government’s increase in the Exchequer contribution to the local government fund will increase by only 2%. This won’t even cover the increase in wage costs of Local Authorities. As Local Authorities look to meet the shortfall through reductions in services and increasing commercial rates and other businesses charges, this will inevitably mean that there will be less money available for allocation to local development and social inclusion projects.
• The development of ‘satellite’ or ‘shadow’ accounts, would measure the real costs of environmental depletion. CORI Justice welcomes the commitment in Towards 2016 to examine the feasibility of introducing these, and looks forward to its implementation in 2007.

Housing and Accommodation

Our Submission Asked that the Budget :

• Acknowledge that everyone has a right to appropriate accommodation and develop policy from this perspective.
• Acknowledge that social housing provision needs to reach 200,000 units by 2013.
• Provide the resources to local authorities and to the voluntary/non-profit housing sector to ensure an increase of 9,000 social housing units in 2007.
• Allocate sufficient resources to RAS (the Rental Accommodation Scheme).
• Provide sufficient resources to address the housing problems of those with a disability.
• Provide sufficient resources to the rent supplement programme and to the housing support programme to ensure that both programmes are adequate to meet current needs.
• Set a target of reducing time spent on waiting lists to a 6 months maximum.
• Provide new resources for the security and management of local authority housing.
• Ensure all second homes pay full infrastructural costs much of which is currently borne by the exchequer.
• Give a special focus to tackling issues concerning accommodation for refugees and asylum seekers.
• Provide the resources required to ensure implementation of the Travellers Accommodation programme.
• Allocate significant additional resources to reduce the unnecessarily long waiting lists for a disabled persons housing grant.

The Budget

• Increased the allocation to Local Authority and Social Housing programmes by 10% (€126m) to €1.4billion. When non-voted resources are taken into account (i.e. loans from the Housing Finance Agency for voluntary and co-operative sector and affordable housing and resources available to local authorities from sales of dwellings. This will provide for:
  • 6,600 Local Authority housing starts or acquisitions.
  • 2,000 Voluntary & Co-operative housing starts.
  • 10,000 households on the Rental Assistance Scheme (RAS) by the end of 200
• Made available the funding needed to take the initiatives required in 2007 to meet the Towards 2016 commitment to deliver 17,000 units of affordable housing over the period 2007 to 2009Made a commitment to start or acquire 27,000 social housing units in the period 2007 – 2009.
• Allocated almost €53m to house improvements for people with special needs.
• Increased the grant to communal facilities in voluntary housing schemes by 1% (€36,000) to €2.48m.
• Reduced grant to Task Force on Special Housing Aid for the Elderly by 10% (€1.8m) to €15.2m.
• Committed to maintaining the provision for Traveller and homeless accommodation.
• Commitment to mortgage interest relief for first time buyers from €4,000 single and €8,000 married per year to €8,000 and €16,000 respectively.

Our Response

• We welcome the allocation for social housing. It provides the resources required in 2007 to honour the commitment made in Towards 2016 to provide an additional 27,000 social housing units in the period 2007-9.
• The most recent assessment of local authority waiting lists found there was a total of 43,684 households on local-authority housing waiting lists. This represents a decrease of 9.8 per cent since the 2002 assessment. However, since 1996 waiting lists have grown by 59.2% and the most recent figure indicates that across Ireland about 120,000 people are in need of accommodation. 73,000 additional social housing units will be required if the social housing shortage is to be addressed by 2013.
• We regret the failure to ensure that all dwellings which are second homes pay the full infrastructural costs, much of which is currently borne by society through the exchequer.
• We welcome the commitments to maintaining the provision for Traveller and homeless accommodation and look forward to Government providing the resources required to address these issues effectively.
• We point to the urgency of developing an assessment of housing need that provides for the needs of single people in low-paid employment who find it impossible to fund private accommodation.
• We welcome the provision of resources to increase the number of households benefiting from the RAS bringing the total to about 10,000 by end-2007.
• The Government’s decision to double the ceiling on mortgage interest relief for first time buyers is welcome.
• Regretfully the issues re accommodation for asylum seekers were not addressed.

Education

Our Submission Asked that the Budget :

• Prioritise funding for Primary education and family based pre-school.
• Provide ‘early start’ programmes in all disadvantaged communities. This would require the initiative be extended outside disadvantaged areas to communities within which there are marked pockets of disadvantage.
• Introduce a Basic Educational Allowance for full-time and part-time education for persons between ages 18 and 40 who do not proceed to third level from school.
• Adopt the National Adult Literacy and Numeracy Implementation Plan developed by NALA, enabling an increase to 10% participation of the target group.
• Extend early start initiatives beyond school year framework to an all year support initiative anchored in the host community, with especial links to family units.
• Research Pupil-Teacher Ratio allocations in all Primary and Post Primary schools with a view to ensuring equity of provision.
• Include ongoing credentialised training for providers of Exchequer funded pre-school initiatives. This should include ongoing evaluation of the outcomes of these initiatives for children and their families.
• Extend the current two-year timeframe and allow greater flexibility for completion of modular Leaving Certificate Applied to facilitate certain workers and parents.

The Budget

• Increased the gross budget by 9% (€708m) to €8.6billion and the pay and pensions allocation by 9% (€442m) to €5.66billion.
• Increased the capitation grant to primary schools by 13% (€17.6m) to €152.8m. (An increase of €18 per pupil) and the grant for non-teaching staff (primary) by 20% (€37.1m) to €227.4m.
• Made allocation for an extra 800 teachers to reduce class size and provide language support for non-nationals.
• Increased the allocation to the National Education Welfare Board by 20% (€1.66m) to €9.8m.
• Increased the capitation grant to second level schools by €18 to €316 per student while the support services grant was increased by €5 to €112.
• Increased the equalization funding to voluntary secondary schools by €25 per pupil.
• Increased the grant to transport services by 9% (€13m) to €165m.
• Provided funding for an extra 3,000 Adult Literacy places and 1,000 extra places on the Back to Education initiative.
• Provided for an extra 400 places on Youthreach.
• Allocated €305m in building grants to primary schools (10% increase) and €229m to secondary schools
• Increased the overall allocation to third level education by 11% (175m) to €1.8 billion.
• Increased the Strategic Innovation Fund by 300% to €60m.
• Increased the student support at third level by 6% (€13m) to €241m.

Our Response

• We welcome the increased allocation for education. The increase in the capitation grant and the allocation for an extra 800 teachers, some of whom will provide language support for non-nationals, are particularly welcome.
• We also welcome the allocation for building grants to primary and secondary schools.
• Early school leaving is a particularly serious manifestation of wider inequality in education which is embedded in and caused by structures in the system itself. We welcome the increased allocation to the Education Welfare Board in this context. However, the problem is not being addressed with the urgency or on the scale it requires.
• The failure to address the adult literacy issue on the scale required is a cause for serious concern. We welcome the allocation of an additional 3,000 adult literacy places. However, access to education for those with literacy difficulties is largely dependent on the services of voluntary literacy instructors under the guidance of adult education officers. The current policy of supporting the full cohort of such adults on a part time basis is ineffective. Effective levels of support for adults with literacy difficulties are necessary. Budget 2007 should have given greater priority to this issue.
• We also regret that Government has not adopted our proposal to introduce a Basic Educational Allowance for full-time and part-time education for persons between ages 18 and 40 who do not proceed to third level from school.
• We note the necessity of ongoing evaluation of outcomes for the multiple and welcome initiatives targeting educational disadvantage.

Healthcare

Our Submission Asked that the Budget :

• Recognise the considerable health inequalities present within the Irish healthcare system and provide sufficient resources to tackle them.
• Meet the commitment in the Towards 2016 to establish an additional 100 primary care teams.
• Raise the eligibility threshold for the medical card.
• Enhance the provision of community care and restructure the healthcare budget accordingly.
• Resource and implement targets on health status within the NAPS.
• Increase the percentage of the health budget allocated to health promotion and education in partnership with all relevant stakeholders.
• Provide the childcare services with the additional resources necessary to effectively implement the Child Care Act.
• Provide substantial additional resources to ensure development of services for older people.
• Resource the development of nursing care for older people in their own community on the model of the hospice care programme.
• Provide additional respite care for elderly people and people with disabilities.
• Resource the development of mental health services, recognising that this will play a key factor in health status.
• Facilitate and fund a campaign to give greater attention to the issue of suicide in Irish society.

The Budget

• Increased Gross Current and capital expenditure to Health & Children to €14.3 billion and €12m respectively.
• Increased allocation for Children by 46% (€167m) to €533m. (€142m of this is committed to Childcare and €9.65m to the Longitudinal Study).
• Committed additional €75m for new units in acute care.
• Increased allocation to the Treatment Purchase Fund by 13% (€10m) to €88.5m and a further €120m for Drug Payment.
• Provided additional €25m for the rollout of 100 Primary Care Teams in 2007.
• Allocated €8m for the expansion of Breastcheck.
• Increased services for older People by €255m including an additional 2,000 Homecare Packages and increased home help hours, day and respite places, improvements in Palliative care, increased residential care places and improvements to Nursing Home Subvention Scheme.
• Allocated €8m for the implementation of the Mental Health Act and further allocation of €25m for the continued implementation of A Vision for Change and National Strategy on Suicide Prevention.
• Allocated €25m to Medical and other Education.
• A 25% increase in the charge for private beds in public hospitals.
• €75m for additional residential, respite and day places for persons with a Disability plus an expansion in home support and personal assistance.

Our Response

• We welcome the increased allocation in the health budget.
• The continued support of enabling older people to stay in their own communities is welcomed. The increase of Home Care Packages and Home Help is a positive move in the right direction. It is important that these provisions are monitored to ensure the highest standard of care .
• It is important to take the necessary steps to secure inter-agency cooperation to ensure the homecare packages focused on supporting individuals will be complemented by support for social and cooperative housing providers. This is necessary to ensure the development of sheltered housing provision that will be required to maximise the value of these homecare packages.
• The commitment to funding an additional 100 Primary Care Teams in 2007 is important to meet the commitment of Towards 2016. This is welcomed. To ensure that appropriate services are delivered the composition of the Teams needs to be based on Local Needs Assessment.
• The allocation of provision of additional respite, residential and day places for persons with a Disability is important in the development of the support services necessary to ensure quality of life for those with disability.
• We regret that the Budget has failed to address the eligibility threshold for medical cards.
• The funding to support the implementation for A Vision for Change and the National Strategy for Action on Suicide Prevention is a positive step, however substantial additional funding is still required to fully implement these strategies.
• The increase in funding to Breastcheck will meet the costs of rollout of the national programme. This is long awaited.

Social Welfare: Social Insurance increases January 2007

PERSONAL AND QUALIFIED ADULT RATES	Present Rate	New Rate	Increase
State Pension (Contributory)
(i) Under 80:
Personal rate	193.3	209.3	16
Person with qualified adult under 66	322.1	348.8	26.7
Person with qualified adult 66 or over	342.6	382.3	39.7
(ii) 80 or over:
Personal rate	203.3	219.3	16
Person with qualified adult under 66	332.1	358.8	26.7
Person with qualified adult 66 or over	352.6	392.3	39.7
State Pension (Transition)
Personal rate	193.3	209.3	16
Person with qualified adult under 66	322.1	348.8	26.7
Person with qualified adult 66 or over	342.6	382.3	39.7
Widow's/Widower's Contributory Pension
(i) Under 66:	171.3	191.3	20
(ii) 66 and under 80:	193.3	209.3	16
(iii) 80 or over:	203.3	219.3	16
Invalidity Pension:
(i) Under 65:
Personal rate	171.3	191.3	20
Person with qualified adult under 66	293.5	327.8	34.3
Person with qualified adult 66 or over	320.6	364.3	43.7
(i) Age 65:
Personal rate	193.3	209.3	16
Person with qualified adult under 66	315.5	345.8	30.3
Person with qualified adult 66 or over	342.6	382.3	39.7
Carer's Benefit
Personal rate	180.7	200.7	20
Occupational Injuries Benefit - Death Benefit Pension
(i) Personal rate under 66	194.6	213.7	19.1
(ii) Personal rate 66 and under 80	197.7	213.7	16
(iii) Personal rate 80 or over	207.7	223.7	16
Occupational Injuries Benefit - Disablement Pension
Personal rate	196.9	216.9	20
Illness/Jobseeker's Benefit
Personal rate	165.8	185.8	20
Person with qualified adult	275.8	309.1	33.3
Injury Benefit/Health and Safety Benefit
Personal rate	165.8	185.8	20
Person with qualified adult	275.8	309.1	33.3
Guardian's Payment (Contributory)
Personal rate	138	158	20
Increases for a qualified child
All schemes except for those underneath	16.8	22	5.2
State Pension (Contributory & Transition), Invalidity Pension	19.3	22	2.7
Widows/Widower's Contributory Pension (and related schemes)	21.6	22	0.4

Increases in Monthly Rates of Child Benefit from April 2007

	€	€	€
Child Benefit
(i) First and Second Children	150	160	10
(ii) Third and Subsequent Children	185	195	10

Social Welfare: Social Assistance increases January 2007

	Present Rate	New Rate	Increase
	€	€	€
State Pension (Non-Contributory)
(i) Under 80:
Personal rate	182	200	18
Person with qualified adult under 66	302.3	332.2	29.9
(ii) 80 or over:
Personal rate	192	210	18
Person with qualified adult under 66	312.3	342.2	29.9
Blind Person's Pension
Personal rate	165.8	185.8	20
Person with qualified adult under 66	275.8	309.1	33.3
Widow's/Widower's Non-Contributory Pension
Personal rate	165.8	185.8	20
One-Parent Family Payment
(including one child)
Personal rate	185.1	207.8	22.7
Carer's Allowance
(i) Under 66	180	200	20
(ii) 66 or over	200	218	18
Disability Allowance
Personal rate	165.8	185.8	20
Person with qualified adult	275.8	309.1	33.3
Supplementary Welfare Allowance
Personal rate	165.8	185.8	20
Person with qualified adult	275.8	309.1	33.3
Jobseeker's Allowance
Personal rate	165.8	185.8	20
Person with qualified adult	275.8	309.1	33.3
Pre-Retirement Allowance/Farm Assist
Personal rate	165.8	185.8	20
Person with qualified adult	275.8	309.1	33.3
Guardian's Payment (Non-Contributory)
Personal rate	138	158	20
Increases for a qualified child
All schemes except for those underneath	16.8	22	5.2
One Parent Family Scheme, State Pension	19.3	22	2.7

Increases in Maximum Weekly Rates of Health Allowances from January 2007

	€	€	€
Supplementary Allowance payable to Blind Persons
in receipt of a Blind Pension
(i) Blind Pensioner	51.6	57.8	6.2
(ii) Blind Married Couple	103.2	115.6	12.4
Infectious Diseases Maintenance Allowance
(i) Personal Rate	165.8	185.8	20
(ii) Person with qualified adult	275.8	309.1	33.3
(iii) Person with qualified adult and qualified child	292.6	331.1	38.5

Promoting Equality in the Welfare System

Budget 2007’s achievement in bringing social welfare rates up to 30% of Gross Average Industrial Earnings (GAIE) is a significant development. Having lobbied and campaigned for this over recent years, CORI Justice is happy to acknowledge its achievement.

However, despite this development, there are still some recipients of social welfare who do not fully benefit from these income improvements — in particular, couples in receipt of a social welfare payment.

At present the welfare system provides a basic payment for a claimant whether a pension, a disability payment or a job-seeker’s payment etc. It then adds an additional payment of about two-thirds of the basic payment for the second person.

For example, following Budget 2007 a couple on the lowest social welfare rate will receive a payment of €309.10 per week. This amount is almost 1.66 times the payment for a single person (€185.80).

The European Commission has designated next year, 2007, as ‘European Year of Equal Opportunity for All’. This designation is part of a concerted effort to promote equality and non-discrimination in the EU.

In 2008 all welfare payments to the second adult in a couple should be made equal to the amount paid to the first adult.

The year is the centrepiece of a framework strategy designed to ensure that discrimination is effectively tackled, diversity is celebrated and equal opportunities for all are promoted.

As part of marking this particular year, CORI Justice urges Government to address this particular issue.

We believe that where a couple are in receipt of welfare payments, the payment for the second person should be increased to equal that for the first person.

In Budget 2007 Government took some steps in this direction. It increased the rate for the second adult of pension age receiving the contributory State Pension to €173 a week which is 82.7% of the rate received by the claimant. We strongly urge Government to take action in 2007 to have all welfare payments paid to the second adult in a couple to be equal to the amount paid for the first adult.

Other CORI Justice Publications

Developing a Fairer Ireland (CORI Justice annual socio-economic review - 2006)
Policy Briefing on Rural Development
A Fairer Tax System for a Fairer Ireland
Policy Briefing on Sustainability
Analysis and critique of social aspects of the national social partnership agreement Towards 2016
Policy Briefing on Taxation
You may download these documents, and many more, for free on our website.

Social Policy in Ireland—Principles, Practice and Problems published by Liffey Press in conjunction with CORI Justice, is also available for €27.95.

 

 

Estimates of Receipts and Expenditure for the year ending 31 December 2007

December 2, 2006: Government White Paper containing the Estimates of Receipts and Expenditure for the year ending 31 December 2007

Estimates for Public Services 2006

November 16, 2006: Estimates for Public Services (Abridged Version) and Summary Public Capital Programme

Policy Briefing on Budget Choices 2007

2006 September 26 - CORI Justice publishes Policy Briefing on Budget Choices Download Pdf

Pre Budget Outlook 2006

Pre Budget Outlook 2006 (Published October 2006)

Budget and Economic Statistics 2006

Budget and Economic Statistics 2006 (Published August 2006)

Child Poverty and Child Income Support 2007

"Child Poverty and Child Income Support" - in ESRI/FFS Budget Perspectives 2007

Disability Benefit - Controlled or Under-Controlled?

Disability Benefit - Controlled or Under-Controlled?

Social and Family Affairs Annual Report 2005

Annual Report of Department of Social and Family Affairs 2005

Effective Tax rates of top 400

Survey of Effective tax rates of top 400 earners for the tax year 2002 (Published June 2006)

Exchequer Pay &amp; Pensions Bill 2001-2006

Analysis of Exchequer Pay and Pensions Bill 2001 - 2006