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Posts tagged ‘Child benefit’

Budget is yet another botched job from our impotent Government

By David Mc Williams

JK Galbraith, the great American economist, said that the key job of a leader was to “understand the anxieties of the people, and do something to ease these anxieties”. The Budget is an opportunity to set out the stall of any leadership, to articulate a coherent policy and to get on with those policies that might assuage the anxieties of the people.

When judged from this standpoint, this Budget is an extraordinarily confused piece of financial gymnastics where the gymnast performs all sorts of tiny contortions, unconnected moves and ultimately lands unbalanced, pleading that the judges see some choreography after all the clumsy footwork.

If anything, it heightens the anxieties of the people because the people who have been hit most are mothers dependent on child benefit, homeowners already in huge negative equity and those who are paying PRSI which has been increased. In fact, one of the greatest myths from yesterday is that income tax has not been increased. What is PRSI, if not a tax?

The Government does not seem to understand that the ticking time bomb in this country is the problem of mortgage arrears, which is primed to go off as taxes rise and incomes fall. This Budget makes the average young worker considerably worse off. These are the very people who are part of the 128,000 who are in arrears, unable, not unwilling, to pay their mortgages. This figure is rising. Their anxieties must be heightened this morning…………..

full article at source: http://www.davidmcwilliams.ie/2012/12/07/budget-is-yet-another-botched-job-from-our-impotent-government?utm_source=Website+Subscribers&utm_campaign=332552d2f8-22112012&utm_medium=email

Savage Budget 2012 -13

By  Charlie Weston and Fionnan Sheahan

THE most savage Budget of the economic downturn has hit ordinary families for €1,000 a year.

Property tax, cuts to child benefit and changes to social insurance have put extraordinary new pressure on squeezed family incomes.

Pensioners will lose out with cuts to the household package that helps for electricity, gas and telephone bills.

And in a move that is set to prove highly controversial, mothers on maternity leave will now have to pay tax on State maternity payments – despite paying for this already through PRSI.

No section of society was left unscathed by the draconian Budget.

In the wake of the delivery of a package of cuts and taxes worth €3.5bn, there were scuffles between gardai and protesters outside Leinster House.

The Government was also under fire for announcing the closure of 100 garda stations, as part of the biggest overhaul in the history of the State, under cover of the Budget.

Families will be pounded by a string of new taxes and charges:

* Maternity benefit will be treated as taxable income — costing mothers an average of €800.

* A new property tax will cost €180 for every €100,000 the property is worth. This means a €200,000 house will generate a property tax of €360.

* Changes to pay related social insurance (PRSI) will mean that all those earning above the minimum wage will pay an extra €264 a year.

* Self-employed PRSI contributions were doubled, and will be applied to unearned income such as dividends, rents and deposit interest.

* A €10 cut to child benefit. A family with two children will be down €240 over a year.

* Another €250 on the student registration charge.

* Changes to the drugs payment scheme which will see families paying out €144 a month before the State will cover the cost.

* Changes to motor tax, with some pre-2008 cars to be levied an extra €126 a year.

* Savers are to be hit with a rise in DIRT of at least 33pc.

* The price of a pint rose by 10c last night, with duty on wine up by €1.

* Cigarettes went up by 10c.

There will also be rises in capital gains and capital acquisitions tax, according to the new measures.

New criteria will also be introduced for those aged over 70 in order to qualify for a medical card, with those on higher incomes eligible for a GP card only.

The duration of jobseeker’s benefit will also be reduced by three months.

The full details of the property tax were provided.

Taoiseach Enda Kenny said the decision to introduce a property tax was “progressive and fair”.

Last night, the Government began passing the Budget measures with votes on the hikes in alcohol and cigarettes.

No coalition TDs defected and the Government passed the vote 108 to 49.

But Labour Party chairman Colm Keaveney has still not committed to voting with the Government on social welfare cuts next week. Former Labour minister Roisin Shortall said the Budget was “regressive and anti-family”.

She also attacked Tanaiste Eamon Gilmore on the size of his pension.

Finance Minister Michael Noonan used his Budget speech to outline his plans for growth in the small business sector – but there are major tax hits for workers and homeowners.

The minister last night denied his Budget will cost the average family €1,000 per year in taxes and lost benefits.

“I don’t accept that figure. You might get an example that fits that but it’s not typical,” he said.

Mr Noonan offered a robust defence of his second Budget, saying it “would be recalled as a reforming Budget” that had finally broadened the tax base by introducing a property tax after years of discussion while also reforming the public and private pension system.

“We have the most progressive income tax system in the EU,” he said.

Public Spending Minister Brendan Howlin admitted it was “not easy” to keep providing public services while imposing over €2bn in spending cuts.

Cutbacks

He announced a range of cutbacks, including a €10 reduction in child benefit and reductions in the telephone and electricity allowances for elderly people.

Mr Howlin said the country would come through the “tough” crisis which was almost without precedent in the developed world. “In time, future generations will be proud that we, as a people, tackled this crisis head on,” he said.

Source:  http://www.independent.ie/national-news/budget/most-savage-budget-yet-takes-1000-from-families-3317482.html

 

Talk about kicking people when they’re down

Sometimes It’s the Little Things

Author: Michael Taft of Notes on the Front

Published: December 12th, 2010

Section: Articles, Economy

Discussion: One comment

Possibly Related: , ,

Yes, the Government has taken a sledge-hammer to the living standards of low and average income earners. But sometimes it’s the little things that expose the venality of policy – the unannounced, below-the-radar, buried-in-a-table-on-page-34-of-an-annex little things.

Last year, when the Government was cutting both social welfare rates and Child Benefit, they increased the Child Dependency Allowances for families on social welfare – to compensate for the loss of Child Benefit. Here’s an example.

LittleThings 1 Last year, Child Benefit was cut by €16 a month, or €3.69 a week. This affected all families. But to ensure that child income support remained the same, the Government increased Child Dependency Allowances by €3.80 per week.

Okay, the family social welfare got hit by the cut in adult rates – but at least child income support was remained approximately the same. In fact, the Minister for Finance at the time made great play of this:

‘ . . . lower and higher rate of Child Benefit will be reduced by €16 per month, bringing these rates to €150 and €187 per month respectively. Welfare dependent families will be fully compensated by increasing the Qualified Child Allowance by €3.80 per week so that they will not be affected by this measure.’

This year they didn’t do that. The Government cut Child Benefit again – by €10 per month for the first and second children. But, unlike last year, they didn’t compensate families on social welfare. They kept the Child Dependency Allowances the same. This was the effect this year.

Little Things 2 This year, not only were adult rates cuts, but child income support was cut as well. Of course, the Minister didn’t refer to this.

In short, last year a family with one child on social welfare saw their income cut by -3.4 percent. This year, they suffered an even worse cut of -4 percent – owing to the Government’s policy of targeting child income support to the lowest income families.

This is all of a piece. The Government gives tax breaks to the highest income groups in society. And then they go after child income support for families living in poverty.

Talk about kicking people when they’re down.

source http://www.irishleftreview.org/

The Poor Can’t Pay

Dear Machholz,
So the budget was just as bad as all the media leaks suggested. At least for the low paid, people with disabilities or those who have already lost their jobs. For the wealthy there was better news: no wealth tax, no tax on very high incomes; and certainly no action against those who caused the crisis. For those on welfare, a further €8 a week was cut from people on most payments. In a particular act of cruelty an extra €2 was cut from Supplementary Welfare Allowance – the payment designed as a safety net for the most vulnerable. This leaves them €520 worse off in a full year.
Children were not spared either. Last year, families on social welfare or low pay received compensatory changes in other payments to make up for Child Benefit cuts. This year they were just cut.
It was also a cowardly budget, full of nasty cuts that the Minister was not honest enough to include in his speech. And now they plan to rush it through the Dáil before TDs have a chance to talk to the voters – or engage with their consciences.
But it is not over yet.
We need to engage all those who will be unfairly hit by this budget and all those who are angry about its unfairness. We need to open the eyes of TDs before they vote.
Some TDs will shy away from voting against the budget because it will bring the Government down. We need to make them realize the strength of resistance to the welfare cuts. But even those who will vote for the welfare cuts might draw the line at voting for the cut in the Minimum Wage – this is not a budget measure and defeating it will not automatically lead to the Government falling.
There are three things you can do which can still make a difference.
– you can send an e-m ail to your local TD from The Poor Can’t Pay web-site
– you can phone one of the six Government TDs who pledged to protect the poor in ‘any way they can’
– you can sign the petition against the Minimum Wage cut on the ‘Claiming our Future’ web site.

Please do it now while it can still make a difference.

Yours sincerely,

Mike Allen
for

for The Poor Can’t Pay

Budget 2011 (Ivan Yates has his ideas)

 

As we get closer and closer to the December budget we are going to get a platter of suggestions and true to form here is one I came across  a few days ago

This is just a flavor of what is going to be on the dissecting table in the Department of Finance in the coming weeks and Fine Gael is the lead with this one not much difference from FF here! So if you’re going to vote for Fine Gael you can expect to see some or all of these measures acted on

Machholz

By columnists/ivan-yates

With prior EU approval required, the heavy lifting for budget day will be done in the next few weeks. It’s time to get down and dirty with the specific measures to close our fiscal deficit by the required €4.5bn. My blueprint requires slaughtering sacred cows.

More than 70% of current spending comprises welfare or payroll costs. Savings are impossible without addressing these head on.

The Department of Social Protection spends €22bn out of €50bn. If old age pensions can’t be cut, the axe must fall on fringe benefits. €966m is being spent on free schemes — without a means test. Pensioners have been exempt from cuts to date. This is despite a significant reduction in the cost of living. Current pensioners receive defined benefit private pensions that will be unattainable to younger generations.

Imaginative innovations of the 1960s need to be reviewed. The staggering costs are as follows: free travel scheme, €626m; free electricity/gas, €165m; free telephone rental, €120m and free TV licence, €55m. These could be phased out over a two-year period, with a 50% subsidy applying for one more year. These universal benefits are currently payable irrespective of income. Should Fergal Quinn, Michael Smurfit and George Hook really have access to free travel and other fringe benefits?

Administrative arguments about the impossibility of child benefit reform are redundant. The British review in the mid-1990s concluded that means testing and taxation was unworkable because of cohabiting couples and current year incomes. Apparently, you could not discriminate constitutionally against married couples relative to unmarried partners. Because of the inadequate database on the latter, there was a veto on change.

The British chancellor George Osborne cut through this confusion by abolishing child benefit where one parent earns more than £50,000 (€56,600) per annum from 2013. We can follow suit. We could halve child benefit under the same circumstances for those between €50,000 and €100,000 per annum and abolish it where one income exceeds €100,000 per annum. We could save €800m out of child benefit costs of €2.26bn.

However distasteful, this would be much more equitable than flat-rate cuts that are envisaged.

Another British government welfare reform is a cap on total payments per household. Should child benefit be paid beyond the fourth or fifth child? The disincentive to work is greatest where there are large numbers of dependants. Total state benefits per household could have a cash ceiling of the industrial average wage or €40,000 per annum. To earn this money, net of income tax, requires extraordinary gross pay levels.

Last year’s budget adjustment to public sector pay did not extend to pensions. Total state occupational pension costs are heading towards €3bn per year. Smart actuarial experts assess the current total state liability on the cost of future public service pensions at €108bn. Given our demographics, with a huge increase of those of pension age by 2030, we must act to mitigate this fiscal time bomb.

An immediate two-tier cut in pensions is now appropriate, along the lines of last year’s pay cut. For example, 5% under €50,000 per annum, along with a 10% reduction over this pension threshold could be achieved.

The link between pensions and contemporary pay grades has to be terminated and replaced with cost of living/inflation increases — reviewable every 10 years. Private sector workers face only defined contribution schemes.

The Croke Park deal has yet to deliver real savings. Blather about redeployment, efficiency and productivity from ministers won’t deliver reform. Each department needs to be given a set objective amount to be saved in 2011 and each year thereafter. This could be achieved by altering the sick pay scheme to reduce absenteeism. In a hospital, closing down the maintenance department and replacing it with subcontractors may be the expedient efficiency. In the Department of Transport it could result in some of the 37 subsidiary organisations being amalgamated.

A central voluntary redundancy package, based on five weeks pay per year, needs to be implemented. Multi-annual targets for numerical reductions are required. The Bord Snip report set out a template for this in each department comprising a total of 17,300 less staff. All public bodies must stop the practice of using up unspent money at the end of each year.

Nothing in life is free. Governments tried to convince us otherwise. Ultimately, these panaceas are economically unsustainable. In 1996 third-level education fees were abolished and the entitlement to free access was established. The beneficiary must be liable for the cost of this valuable service. More open competition between universities, colleges and institutes should be based on price and quality. A phased reduction of state subvention would oblige these education dons to cut their cloth according to the market measure. It is patently unfair that an early school-leaver, now a manual labourer, should subsidise the wealthiest kids in our most esteemed educational facilities.

In 2002 it was decreed that household water should be free. By 2050, the world’s scarcest commodity will be water — not oil, fossil fuels or food. EU directives require us to charge for water supplies. In rural areas you have to pay the full cost whether sinking your own pump, procuring a private group water scheme or are on a public supply meter. Free water is unappreciated, disrespected and wasted.

A SEMI-STATE company could replace our local authority water provision. Water could be provided and paid for in the same way as a phone, gas or electricity by a commercial utility provider. Deferring liability until metering is in place is a cowardly cop-out. An immediate minimum flat charge of €3 per week is modest and reasonable.

Colm McCarthy’s proposals to rationalise and amalgamate quangos have been subject to the most intense obfuscation. This can no longer be tolerated. A zero budgeting principle needs to apply. Senior civil servants are guilty of facilitating obstruction by bodies under their aegis. Petty turf wars have been sponsored by compliant secretary generals and ministers. They have allowed themselves to see their cabinet role as defending their patch.

A general repeal of legislation giving statutory effect to these organisations needs to be threatened. The myriad of partnership boards, regional bodies and county structures amounts to a maze of bureaucracy — each with its own human resources and accounts departments. These are no longer affordable and don’t provide essential core public services. €2bn can be saved through a deferral of Metro North, the National Children’s Hospital and other capital projects. This menu is without recourse to tax increases or cuts in rates of welfare. Just like a tooth extraction, the anticipation is worse than the actuality. The gaping hole heals and new normality asserts.

Let’s bite the bullet and cull those cows.

This story appeared in the printed version of the Irish Examiner Thursday, October 14, 2010

Read more: http://www.irishexaminer.ie/opinion/columnists/ivan-yates/lets-get-rid-of-all-those-freebies-and-put-a-ceiling-on-child-benefits-133426.html#ixzz12nSaaY1n

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