Hands off welfare, Labour warns FG
THE Labour Party has issued a "hands off social welfare" warning to its Coalition partners in Fine Gael ahead of next year's Budget.
Senior Labour sources said cuts to Tanaiste Joan Burton's Department of Social Protection are strictly "out of bounds" as Budget 2015 discussions begin this week.
The warning from Labour follows Health Minister Leo Varadkar's insistence that his department will need an additional €500m.
Mr Varadkar's predecessor James Reilly clashed with Ms Burton last year over the massive shortfall in the Department of Health's budget.
The row now looks set to reignite cabinet tensions as ministers position themselves to benefit from what is being billed as a "neutral budget".
Despite previous forecasts, cuts and tax hikes totalling €2.1bn will not be needed, and the Government has signalled the possibility of introducing tax initiatives which would benefit low and middle-income earners.
However, Public Expenditure Minister Brendan Howlin said additional spending in one area, such as health, will mean savings will be needed elsewhere.
The Department of Social Protection has made major savings in recent years by cutting down on social welfare fraud and putting people back to work. In July, the department was €120m under budget and additional savings are expected.
However, cuts to child benefit and reductions in dole payments damaged Labour and the party suffered badly in the recent elections.
A senior Labour source said the party believed it has done the "majority of the heavy lifting" in terms of adjustments in social welfare and does not envisage any further reductions.
"We made a big thing about protecting core welfare rates over the last number of years and managed to do that," the source said.
"There won't be any reductions in pensions or dole payments. We already said there would be no reduction."