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A €15 increase in welfare payments is being considered before the budget

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A €15 increase in all social benefits will be considered in advance of the budget.

Newly released government papers estimate the move will cost more than 1.1 billion euros.

However, increases in employee and employer PRSI contributions are also being considered to fill the growing gap in the state pension fund.

The Treasury released its annual Tax Strategy Group papers detailing the options and costs ministers will consider ahead of the budget scheduled for September 27.

The documents form the backbone of the government’s budget negotiations and give a clue as to what is being considered before Finance Secretary Paschal Donohoe and Public Expenditure Secretary Michael McGrath, who are delivering their budget speeches in the Dáil next month

The Social Protection Budget Package document outlines a range of options to increase all social assistance rates, such as the state pension, job seeker benefits and disability benefits, by €15.

According to the paper, a €15 increase would result in a person on a working-age payment increasing their weekly rate to €223, while a person on a contributory state pension would increase their rate to €268.30 per week.

It states that a €15 increase in all tax rates, together with proportional increases for qualifying adults and those with reduced payment rates, would cost taxpayers €1.1 billion. An increase in the lone living allowance by €6.50 per week at a cost of €78.1 million is also being considered.

The other option being considered before the budget is a €10 weekly rate increase for all benefits, with a proportional increase for qualifying adults, along with a €10 increase in the weekly fuel allowance, €10 increase in the single living allowance, 8 € increase for eligible children under the age of 12 and €14 increase for children aged 12 and over. This option would also cost €1.1 billion.

An increase in welfare rates based on the Harmonized Index of Consumer Prices (HICP) is also being considered. Based on the May index rate, this would mean an 8.3% increase in payments, or €21.10 more per week for welfare recipients, at a cost of €1.6 billion.

A Christmas bonus-like double social assistance of 311 million euros is also on the table.

The report also warns of a growing black hole in the Social Security Fund, which finances pension payments. The fund is forecast to be worth €2.3 billion in 2030 and €13 billion by 2050, before steadily increasing to €21 billion by 2070.

It proposes increasing employer and employee PRSI rates by 1.5 percent over the next five years. This would increase the employee contribution rate, which has remained unchanged since 2001, from 4 percent to 5.5 percent and the employer contribution from 11.05 percent to 12.55 percent.

She also proposes phasing out the lower employer contribution rate, currently 8.8 percent, by gradually increasing it over five years to reach the new standard rate of 12.55 percent.

https://www.independent.ie/irish-news/social-welfare-payment-increase-of-15-being-considered-ahead-of-budget-41902830.html A €15 increase in welfare payments is being considered before the budget

Fry Electronics Team

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