Five reasons why there is NO justification for Government to reduce social welfare rates in Budget 2013

Posted on Thursday, 15 September 2011

There is absolutely no justification for Government to reduce social welfare rates in Budget 2013 according to Social Justice Ireland.

Speaking at the Minister for Social Protection's annual Pre-Budget Forum (October 12, 2012) Social Justice Ireland pointed out that Government can reduce its borrowing by €3.5bn in Budget 2013 while still protecting Ireland’s most vulnerable people who have taken more than their fair share of the ‘hit’ for the reckless and at times illegal activities of those who got Ireland into its present mess.

Those surviving on low incomes continue to struggle and, unlike other groups in society, have no room to absorb income cuts. Any such cuts would simply deepen their poverty and further undermine their attempts to live their lives with dignity.

Social Justice Ireland pointed out that:

15.8% of Ireland’s population is at risk of poverty with incomes below €10,842 for a single person or €25,154 for a household of four.

More than 700,000 people in Ireland are at risk of poverty of whom 200,000 are children.

More than one in four of all children between 12 and 17 years of age are living in poverty.

29% of all the households at risk of poverty today are headed by a person with a job.  A further 42% are headed by a person outside the labour force (i.e. older people and people who are ill, have a serious disability or are in caring roles) and are totally dependent on social welfare.

In the current difficult economic climate, Social Justice Ireland believes that social welfare rates should not be reduced for five reasons:

SW payments are low and for most households do not cover the minimum they require to live life with dignity.

Inflation rose by 2% in the twelve months to August 2012 and is set to continue rising for the coming year so to stand still welfare rates should rise by that amount.  However Social Justice Ireland recognises the difficult economic position the government is in and accepts that an increase would be very difficult to achieve.

Without the social welfare system Ireland’s poverty rate in 2010 (the latest year for which data is available) would have been 51 per cent. The actual poverty figure of 15.8 per cent reflects the fact that social welfare payments reduced poverty by 32.1 percentage points.

Without any social welfare payments 91% of all those aged 65+yrs would be living in poverty.  Similarly, social welfare payments (including child benefit) reduce poverty among those under-18 years from 52.4 per cent to 19.5 per cent.

Government can achieve its fiscal targets without reducing welfare rates. Social Justice Ireland has published a fully-costed Budget for 2013 showing how this can be done and how vulnerable people can be protected.

In this context Social Justice Ireland also believes that Child Benefit should not be reduced in Budget 2013 and has made a detailed submission to the Minister on this issue. We have also published a detailed Briefing on this issue.

Social Justice Ireland also made a proposal to Minister Joan Burton urging Government to create a Part-Time Job Opportunities programme along the lines of the programme piloted in the 1994-1998.  The new programme:

Would create 100,000 part-time jobs for unemployed people over a three-year period;

Paid at the going rate for the job;

Participants working the number of hours required to earn the equivalent of their social welfare payment and a small top-up

Up to a maximum of 19.5 hours a week.

Access on a voluntary basis only;

Jobs would be created in the public sector and the community and voluntary sector;

Participants would be remunerated principally through the reallocation of social welfare payments.

Working on these jobs participants would be allowed to take up other paid employment in their spare time without incurring loss of benefits and would be liable to tax in the normal way if their income was sufficient to bring them into the tax net.

Social Justice Ireland's Policy Briefing on Budget Choices may be accessed here

Social Justice Ireland's Briefing on Child Benefit and Child Poverty may be accessed here.