Statement by Tánaiste and Minister for Employment Affairs and Social Protection Joan Burton at Budget 2016 Press Conference


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13 October 2015

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The purpose of today’s Budget is to improve the lives and living standards of every family in the country.

Having stood firm and done the right thing, Ireland now faces a decade of opportunity.

The opportunity to become the best country in which to live, work and raise a family.

The opportunity to invest in the services that will make this a reality.

The opportunity to create a strong economy, a decent society and thriving communities.

Through the perseverance of our people, we now have a very strong recovery.

However, I’m acutely conscious that not everyone is yet feeling that recovery.

So we cannot take this great opportunity for granted.

We must maintain a strong economy to invest in the services that a decent society requires.

Our job and my priority is to make sure that happens.

Last year, with limited resources, we made a reasonable start.

This year, we are building on that progress.

This is a Budget designed to help low and middle income workers, families, retired people, and vulnerable people.

As Tanaiste and Labour leader, I want to first point to some measures I consider particularly vital across the whole of Government.

They include reducing USC and increasing the Minimum Wage.

Because the best route of poverty is a job.

And the best way of continuing to create jobs is by ensuring that work always pays.

However, we are not focusing on raising incomes alone.

We are also investing heavily in the services a decent society requires:

  • Expanding the early childhood care and education scheme;
  • Reducing the pupil-teacher ratio in schools; and
  • Funding the next phase of free GP care – for six to 11-year-olds.

Turning specifically to social protection, the first point to make is that this is another pro-work Budget.

The reason we can announce a €251 million package of increased welfare supports today is that so many jobseekers are returning to work.

Unemployment has declined for 12 successive quarters.

That means jobseeker payments are falling, and we can use that money in other ways.

As always, this package has been designed after extensive consultation with NGOs and advocacy groups in the social protection sector.

Today, I am announcing a number of initiatives with four main aims:

  • to deliver welfare improvements for pensioners aged 66 and over;
  • to strengthen supports for all families with children;
  • to enhance incentives for employment and to make work pay; and
  • to provide targeted assistance for vulnerable groups, such as carers and people with disabilities.

     

Weekly rates:

Throughout the worst of the crisis, we protected the State pension.

Now, today, I am pleased to announce a €3 increase in the weekly rate of payments to all social welfare recipients aged 66 and over.

More than 676,500 pensioners and their dependents will benefit.

This is the first weekly rate increase for pensioners since 2009, and is long overdue.

In the years since, so many pensioners have supported their adult children and their families throughout very difficult times.

They deserve to see their income in retirement increase now that we have some room to do so.

They will also benefit from the 75% Christmas Bonus, which I will return to.

Children:

There are a number of measures supporting families with children.

I am allocating €5 million in 2016 for a new Paternity Benefit scheme, commencing in September after the relevant legislation has been passed.

It will allow fathers in employment to take two weeks’ paternity leave, paid at €230 per week, based on the same PRSI contributions as required for Maternity Benefit.

There will be an increase in the Child Benefit rate of €5, bringing the monthly rate from €135 to €140 per child.

That will benefit more than 623,000 families, and almost 1.2 million children.

I also make no apologies for retaining Child Benefit as a universal payment, because overwhelmingly it is paid to mothers – whether working in the home or outside it – and is a crucial support.

Funding for the School Meals programme will increase by €3 million to €42 million next year.

Supporting families in work:

To further support families in work, I am announcing important measures.

The income thresholds for Family Income Supplement will be increased by €5 for families with one child and €10 for families with two or more children.

This will result in an additional €3 or €6 per week for low-income working families in receipt of the supplement.

This measure will benefit nearly 60,000 families and over 131,000 children.

In addition, lone parent families who transitioned from One Parent Family Payment to the jobseeker’s allowance transitional arrangements will benefit from changes to the latter.

Put simply, these measures will ensure additional income for lone parents in the workforce and help them build towards financial independence over time.

PRSI:

Earlier this year, I signalled that the issue of PRSI would be addressed if the Minimum Wage was increased.

In conjunction with the increase in the Minimum Wage, therefore, I am introducing a new tapered PRSI Credit for Class A PRSI employees earning between €352.01 and €424 in a week.

This will reduce the weekly PRSI bill for over 88,000 employees and will be on top of the gains from the USC changes announced by the Minister for Finance earlier.

In addition, the lower 8.5% Class A rate of employer PRSI will be extended to over 26,000 employers as we increase the employer threshold from €356 to €376.

Carers:

Carers play an incredibly important role in our society.

I am pleased to announce that the Respite Care Grant will be increased by €325 to €1,700 per year.

The name of the grant will change next year to the Carer’s Support Grant to reflect its usage, which is broader than respite only.

In addition, carers who are in receipt of Carer’s Allowance will continue to receive their payment for an additional 6 weeks subsequent to the death of the loved one for whom they are caring.

This will bring the total grace period from 6 weeks to 12 weeks.

Fuel Allowance:

Fuel Allowance will be increased by €2.50 a week to €22.50 for the duration of the fuel season.

This is a targeted measure that will benefit almost 381,000 low-income households.

Christmas Bonus

As you know, I partially restored the Christmas Bonus last year with a 25% payment.

The bonus will be further improved this year.

A 75% bonus will be paid in early December to all long-term welfare recipients including pensioners, lone parents, jobseekers, carers and people with disabilities at a cost of €197 million.

For a single person on Disability Allowance, this will mean a bonus payment of €141 at Christmas.

For a pensioner couple, both in receipt of the non-contributory State Pension, it will mean a bonus payment of €327.50.

I make no apologies to those who question the logic of our spend on the bonus.

As Tanaiste and Labour leader, my focus is on trying to ensure we can improve things for every person, not just a few.

The people of this country deserve immense credit for ensuring that social solidarity remained intact throughout the crisis, when it fractured in other countries.

That solidarity is based on a simple concept – that age-old Irish tradition of looking out for someone less fortunate than yourself.

The bonus is a welcome assistance to many groups at a financially stressful time of year.

It is also spent in the local economy, in local businesses and stores, providing a stimulus to communities across the country.

Concluding remarks:

In the worst of times this Government maintained a massively strong social welfare safety net, protecting core weekly rates throughout the crisis.

That welfare safety net is among the best in Europe at safeguarding against poverty, and the evidence proves it.

Now that the recovery is under way, we can reinvest anew to strengthen that safety net, while at the same time expanding measures to help jobseekers back to work.

ENDS

Last modified:13/10/2015