£8 Dole increase 'bare minimum'

6 Dec 2000

Social Welfare
The Irish National Organisation of the Unemployed has stated that the £8 increase in unemployment payments is the absolute minimum increase that could have been made without provoking a crisis in social partnership. As it stands, this minimal rate may again be wiped out by inflation - McCreevy's anti-inflation package is far from convincing.

"The increase in basic social welfare payments should have been at least £10 per week. Unless the anti inflationary measures deliver a substantially reduced rate of inflation, we are very concerned that the value of this payment will yet again be wiped out. And once again, McCreevy had to favour the 'deserving' poor with a higher increase than the 'undeserving' poor".

With a surplus of £3.5 billion, this social inclusion package was inadequate. "The PPF makes a commitment to a rate of £100 for the lowest rate of social welfare payments - this requires a least an £8 increase for each of the 3 budgets under the PPF. However, the Programme also commits to achieving faster progress in the event that additional resources were available. This year the Minister had a surplus of at least £3.5 billion - if faster progress cannot be made now, when can it?

This Budget places very serious question marks over the PPF's commitments to those on social welfare.

Child Benefit
The increase in Child Benefit has been described by the Organisation as "good for child poverty but not for childcare".

"The £100 Child Benefit target in the PPF is to cater for child welfare. In this context, the increases of £25 and £30 per month are welcome progress in addressing child poverty. In addition, the INOU welcome the government's commitment to a universal approach to childcare. However, increases of this order are completely inadequate to meet both child poverty and childcare. In addition, as Child Benefit is not taxable, it is poorly targeted. The INOU argued for a universal and taxable payment for childcare as part of the Childcare 2000 Campaign, in order to ensure that those who need most will get most. This will not be possible with Child Benefit, which pays the same amount to the very rich as to the very poor" said Camille Loftus, INOU Welfare to Work Co-ordinator.

"Under the PPF, the Working Group on Benchmarking and Indexation of Social Welfare Payments will now have to set a new Income Standard for Children, that takes account of this much wider range of costs" said Camille Loftus, INOU Welfare to Work Co-ordinator.

The £25 increase in Family Income Supplement is also welcome - but again, it's the absolute minimum. The INOU called for these limits to be increased by £30 - and that was in the context of much higher social welfare increases.

Taxation
This is yet another McCreevy tax package that favours the wealthy. Cutting tax rates means that the more money you have, the more money you get. The fact that most of the money was spent on widening the Standard Rate Band, and cutting tax rates, means that the most of the benefit will again go to the top 23% of tax payers.

The balance of resource allocation in the tax package clearly runs counter to the PPF, which states that tax credits will be the "priority area for resources over the life of the Programme". Yet Minister McCreevy spent less than half of this tax package on this 'priority area' - £540 million out of a total package of £1,231 million. Mr. McCreevy must have a different understanding of the term priority than the rest of the world.

He also appears to have a different understanding of the nature of work incentives. He gave people on social welfare a minimal £8, and those on the minimum wage £8.20 - an extra 20p a week doesn't count as an increase in the incentive to work in anybody's books. The Minister couldn't even increase the Tax Exemption Limits - the only tax reform measure exclusively targeted at the low paid - sufficiently to exempt the minimum wage from tax.

ENDS

For further information contact:
Tony Monks, General Secretary INOU
087 249 6066 / 01 856 0088
Noeleen Hartigan, Press Officer
087 61 67689 / 01 856 0088