Cuts in Social Welfare rates next on the cutbacks agenda?

[kerrynorth]

On The Week in Politics Brian Lenihan did not rule out cuts in Social Welfare rates in the next budget. He certainly indicated that there will be no Social Welfare increases in a period of deflation as we are now entering. He did indicate that the minimum wage would be brought into the tax net year as part of broadening the tax base. That being the case then the government will be forced to cut Social Welfare payments to preserve the attractiveness of work over that of staying on Social Welfare. Social Welfare accounts for about 1/3rd of government spending.

[MortgageBroker]

if we are to believe that a general deflation will be a hallmark of our economy in the coming year then it would actually make sense to freeze any increase in social welfare or even drop it and also to widen the tax base to include more workers who presently pay no tax, this would help to reduce the 34% of people in the workforce who pay no income tax.

deflation means that your purchasing power increases for every euro earned, however, if we are to tax even the lowest paid then social welfare HAS to be reduced in order to make it an unattractive option.

balancing these books is going to be one ugly affair.

[jcdf]

They should not have bothered putting it up in the first place.
Social welfare does not just mean dole payments but also disability payments and carers allowance. Any idea how these are to be affected?

[kerrynorth]

Thats what I am getting at MB. If the minimum wage is to be brought into the tax net as will happen then cuts to Social Welfare will also have to happen as it otherwise becomes more attractive to stay on Social Welfare. Therefore, his prevarication on possible Social Welfare rate cuts is disengenious because it is the inevitable consequence of cutting the net pay of the 34% currently not paying any income tax.

[Catalpa]

For a lot of people who would only pull a 'McJob' anyway and wouldn't have much chance of improving on that anyway then staying on Social Welfare at the moment isn't such a bad option.

just can't see the Government doing this - that could lead to real social trouble.

More likely is no more increases over the next few years which will be easier to implement and probably help maintain political stablity in what will certainly be a very rough time.

[Question R24U]

No next is public service cuts - an bord snip. Then broadening the tax case ie making more people pay more taxes. After that, social welfare cuts may be on the agenda - but they will be of the socially less acceptable type, like slappers, the homeless and those who want to go back to education and others trapped in the underclass. Frozen rates will be the same as cuts, since food and energy may be down now but may rise and many get caught by stealth charges.

[Swingingdoor]

NO, no. There will be no trouble from the unemployed.
The INOU will see to that.
Sure arn't they part of the social parnership. That shower that sleeped walked us into this problem in teh first place.

[irelandproud]

I dont think they are stupid enough to do this, if they even tried it there would be riots on the streets for weeks and id be there with them.

[Swingingdoor]

There were no riots on teh streets in the 80's when teh unemployment rate hit the 18% mark. You cannot organise unemployed people into a resistance or protest group. It was tried before

[FutureTaoiseach]

Certainly the childcare allowance needs to be abolished and replaced with a refundable tax-credit. There is no equity in a system that hands out a lump-sum which is then sent to Poland where it goes many times further than in Ireland. It constitutes a form of discrimination against Irish people in that respect. The aim of the allowance was purportedly to pay for the cost of childcare in Ireland. The govt denied it later, but the reality is that they were caught napping when it transpired it would end up going to Accession state nationals with children not even living in Ireland. This certainly needs to be addressed forthwith. Beyond that, means-testing is required so as to exclude the upper-classes from social-welfare. Millionaires and billionaires do not need social-welfare, and it is wrong to insist otherwise. It also constitutes another element of what I have termed regressive wealth transfer from the poor to the rich, and its defence a form of champagne-socialism.