Wednesday 26 October 2016

Coalition targets the grey vote with €115 Christmas bonus ahead of election

Minister for Social Protection and Tánaiste Joan Burton
Minister for Social Protection and Tánaiste Joan Burton

Pensioners and thousands of social welfare recipients are in line for a Christmas bonus of €115 for a single person and €220 for couples as the Coalition's Budget giveaway stacks up.

Buoyed by a rise in support, the Government parties are now looking to lock down votes from workers, families, business, the public sector and farmers.

A full-restoration of the respite care grant is also on the table as the Coalition seeks to reverse the savage austerity cuts of the last seven years.

Writing in today's Irish Independent, Tánaiste Joan Burton says the Christmas bonus will be increased to 50pc this year - bringing it up to €115 for a single pensioner and €220 for a couple.

After being slashed completely during the economic crisis, Ms Burton is bringing the Christmas bonus back gradually, by a quarter last year and a half this year.

"In money terms, a 50pc bonus would mean an extra €115 at Christmas for a person on the State contributory pension, and almost €220 extra for a pensioner couple. It would mean an extra €102 for a carer, and more if that carer has children," she said.

However, Ms Burton could face resistance from her party colleague Public Expenditure Brendan Howlin, whose department was "resolutely opposed" to the return of the Christmas bonus when she forced through the payment last year.

Documents released under the Freedom of Information Act reveal that officials in the Department of Social Protection believed Mr Howlin's department was vehemently against bringing back the payment.

Senior civil servant John Conlan warned Department of Social Protection secretary general Niamh O'Donoghue a week before last year's Budget that the bonus had not been "subject of any negotiation" in the Department of Public Expenditure (DPER).

"We understand DPER are resolutely opposed to such a payment this year," Mr Conlan wrote. And in April last year, Ms Burton's own officials warned that there was "no scope" within the department's budget to bring back the bonus.

However, senior Labour figures say that as with last year, the bonus will not affect next year's budget estimates as the expected €120m cost will come from a significant reduction in Jobseeker payments.

Ms Burton also says that the Budget will see "increased investment in our health, education and childcare".

The Coalition is planning major investment in childcare, with some estimates on the spend suggesting that more €200m could be allocated to win the votes of hard-pressed working parents.

This is likely to include the introduction of paternity leave for fathers, an extra free pre-school year and after-school care at primary level.

Finance Minister Michael Noonan is also considering slashing the hated Universal Social Charge by around 1.5pc.

Ms Burton believes that there is now potential to completely "phase out" the tax over a "series of budgets".

Coalition sources suggested last night that a mooted 2pc USC cut may not be possible as it would require tax hikes elsewhere. One area where taxes will rise is on cigarettes.

Entrepreneurs and farmers will also benefit in the Budget from measures aimed at equalising the amount of tax paid by PAYE workers and the self-employed.

The higher rate of USC paid by the self-employed is likely to be addressed. Cuts to Capital Gains Tax will also benefit the self-employed if introduced.

The annual grant that carers receive towards respite care was controversially cut by €300 in 2013, bringing it down to a reduced rate of €1,375.

The grant is paid to around 80,000 families, a quarter of whom receive no other State support for providing full-time care for a family member.

Fine Gael backbenchers made what was described as a "big push" to Cabinet ministers to restore the respite grant at the party think-in in Limerick last week. Government sources said the grant was being assessed but it was "too early" to say if it would be resorted.

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