FAMILIES are facing a €10 cut in child benefit and medical card holders will see a doubling of the charges they pay for prescription drugs in next week’s Budget.
Pensioners are also still in the firing line, with changes to the over-70s medical card and the home package of free TV licence, electricity and telephone allowances still on the table.
Although the pension is safe, the rest of the benefits for the elderly have yet to be decided upon by ministers.
The Cabinet met twice yesterday to work through the health and social-welfare aspects of the budget, with another special meeting tomorrow evening.
Among the swingeing measures to emerge from the discussions are:
* A €10-a-month cut in child benefit, which will drop from €140 to €130.
* A cut to the time for which non-means-tested dole is paid from 12 months to nine months.
* A doubling of the 50 cent charge that medical card holders pay for medicines and other items that they get on prescription from pharmacies, up to a maximum of 10 items per month.
And further details have emerged about the property tax, which will come into effect next year, following yesterday’s revelations of the plan in the Irish Independent.
* Elderly people will be given the chance to pay the property tax on their home from beyond the grave
* People living in council houses are expected to be hit with higher rents – with rises of €1 or €2 a week to bring in €50-€100 a year per house.
The Government has devised a way of protecting old people who live in large houses where they raised their children and who now can’t afford to pay the property tax from their meagre pensions.
Rather than forcing them to borrow or sell their home, elderly people will be able to apply via a means test for a deferral of the property-tax payment. However, there will be a cap on the number of years that can be deferred.
Similar to the Fair Deal nursing-home scheme, the accumulated bill would then be paid when the person sells their house or if they pass away, when their estate would pay it off.
Although local-authority housing will be exempt from the property tax, the occupants will have to make a larger contribution to take account of the charge going to local services.
Those in council estates who bought out their houses will have to pay the full property tax anyway, so the Government wants to see every home make a contribution.
The property-tax rate will be at 0.2pc in a self-assessment system, with bands starting at €50,000 and going up by €50,000 each time.
There is no cap on the market value of the home, so millionaires living in mansions will pay the same percentage on the total value of their house.
Someone living in a house worth €100,000 will pay up to €200, while someone living in a house worth €1m will pay up to €2,000.
The amount of tax to be paid is set at the mid-point of the bands. For instance, where the value of the house falls anywhere within the band of €100,000 to €150,000, the homeowner will pay on 0.2pc of €125,000 i.e. €250.
A special meeting of the Cabinet yesterday saw the detail of the health and social-welfare budgets thrashed out.
Any changes to the medical-card system are not yet signed off. But the over-70s are being closely examined, especially the means-testing threshold of €72,000 for a married couple and €36,000 for a single person.
A move towards a GP-only card is being examined for those on healthy pensions. The pension will not be cut and the free travel scheme is not expected to be touched. But a cut to the package of free TV licence, electricity and phone is still alive.
There will be a change to the entitlement to the dole. When someone becomes unemployed, they go onto the non-means tested dole, unemployment benefit, of €188 a week.
After 12 months, they move to the means-tested payment of the same amount. However, if another member of their family is working, this can put them over the means-test limit.
This period will be cut back to nine months to encourage people to get back to work.
But Labour Party sources believe this will not have a major effect on its policy not to cut welfare benefits. Party figures claim it is not a direct cut to a core social welfare payment.
– Fionnan Sheahan and Fiach Kelly
The Coalition was forced into a U-turn after last December’s budget when its plan to stop the practice of paying disability allowance directly to 16- and 17-year-olds met strong opposition from the parents of severely disabled children and Opposition parties.
The contentious proposal to increase the minimum qualifying age for the allowance from 16 to 18, while providing a compensatory payment for the teenager’s parent or guardian, is back on the agenda as Budget 2013 approaches.
Minister for Social Protection Joan Burton has said the EU–European Central Bank–International Monetary Fund troika has raised concerns about social welfare payments going straight to under-18s and said she was worried about young people losing the incentive to stay in education.
Ms Burton charged the expert advisory group on tax and social welfare with resolving such anomalies in the social welfare code. The group submitted its report on family income supports, including child benefit, to Ms Burton earlier this year. The Minister will receive the group’s work on State payments to the disabled shortly. The group will propose withholding disability allowance from 16 year olds who are new claimants while extending the domiciliary care allowance to the children’s carers. Currently, a domiciliary care allowance is paid to the parents of a child with a disability until the child is 16, after which the teenager goes on disability allowance in his or her own right.
The weekly maximum rate of disability allowance is €188. The domiciliary care allowance rate is €309.50 per month, although those in receipt of the payment may also qualify for carer’s benefit or carer’s allowance. A respite care grant of €1,700 a year can also be claimed and child benefit is not affected.
The proposal could save up to €200m a year
The report says this proposal could save up to €200m a year.
Currently, child benefit is paid at €140 per child for the first two children, the third child receives €148, while €160 is paid for the fourth and subsequent children.
In last year’s budget, the Public Expenditure Minister Brendan Howlin said the rates would be standardised to €140 for all children over the next two years.
MIDDLE-INCOME families who have been hit hardest by austerity and stealth taxes cannot take another “hammering” in the Budget, senior Fine Gael Minister Leo Varadkar has said in what will be seen as a blunt warning to Labour that the ‘coping classes’ have had enough hardship.
The Transport Minister has warned that a property tax is just about the limit of extra taxation that ordinary working people can take in the December Budget and that raising extra revenue from middle-class voters — such as taxing child benefit — was not sustainable.
He also indicated strongly that the new property tax would have to include some measures which would stop the charge becoming essentially an urban tax.