herald

Sunday 17 December 2017

Cutting pension to below €215 will 'stoke rage'

DANGER: Areas once off-limits 'now at risk'

PENSIONERS are set to lose over €5-a-week in the savage December budget, the Herald has learned.

Under the plans being considered by Finance Minister Brian Lenihan, the State pension will be cut by as much as 2.5pc.

The Government is also prepared to reduce some social welfare payments, including the dole, by as much as 5pc.

The Herald understands that pensioners -- who escaped largely unscathed from last year's Budget -- will not be so lucky this time around.

Sources suggest that the Government accepts "nobody can be considered untouchable" as part of an effort to save in the region of €5bn in December's Budget.

Slashed

Health, Education and capital projects will see funding slashed again.

A 5pc cut in social welfare would reduce dole payments by up to €10 if applied to the 455,000 unemployed.

But the proposed move against the state pension could prove the most controversial in a "hairshirt" Budget.

According to informed sources, a cut of 2.5pc is being seriously considered in spite of fears that it could spark street protests by old age pensioners.

If the proposal is included in the Budget on December 7 it could see the non-contributory State pension reduced by around €5.50 a week to under €215.

A source noted: "Brian Lenihan won't want to stoke up the rage that was caused by medical card fiasco two years ago but the reality is such that areas once seen as off-limits are now in play."

Mr Lenihan announced yesterday that savings of €15bn will have to be made over the next four years but the exact details are still being teased out.

Ministers are sorting through a huge range of options in an effort to "balance the impact on society".

Sensitive

They would prepare to avoid the politically sensitive issue of pensions but cannot overlook them again while simultaneously dipping into the pockets of hard-pressed workers and other social welfare recipients.

Welfare payments are certain to take some sort of hit, thought to be as much as 5pc.

The jobseeker's allowance and other payments were cut by €8.30 last year and sources suggest that a similar amount could be shaved off next year.

Other welfare allowances such as child benefit will face a steeper cut. The Herald previously reported that a further 10pc cut for child benefit is on the table and will cost parents around €15 per child.

The Budget may also review the medical card system and other schemes that allow people to obtain free health services.

Health Minister Mary Harney has already indicated that up to €1bn will be cut from her funding.

The minister is keen to be seen to be protecting frontline services as much as possible but this may result in people paying more for their healthcare.

Frontline

Last year, the HSE introduced measure to reduce the cost of the Dental Treatment Services Scheme (DTSS) which it wanted to contain at €63m.

However, despite the tougher rules, it is projected that expenditure on the DTSS scheme will reach €79m by the end of this year.

There has also been an increase in the number of people obtaining a GP-only medical card and the Health Minister may be asked to address this.

A briefing document was circulated to ministers at a Cabinet meeting this week warning that every €1bn in cuts could reduce the economic growth rate by 0.25-0.5pc.

hnews@herald.ie

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