Once-off payments will be welcomed but the payback will be modest social welfare increases

We were told this would be a “giveaway” budget in advance of a general election. And though Minister for Social Protection Heather Humphreys detailed the “largest budget package” in the history of the State, at €2.6 billion, it has been greeted with disappointment in many quarters.
Given the hoopla and hand-rubbing that greeted the €14 billion Apple tax windfall, not to mention record corporation tax receipts, the disappointment is easy to understand. Advocacy groups had looked for between €15 and €25 increases in weekly, core welfare rates and, to target child poverty, a second tier of the €140 a month child benefit for the poorest children. These would have been sustained, long-term and reliable increases that households could count on.
Instead, core rates will increase by a modest €12 a week from January – bringing, for instance, disability and jobseekers’ allowance and the non-contributory pension up to €244 a week. A series of lump sums will be distributed among these vulnerable households between now and January.
And instead of a second-tier child benefit, which would have been worth €1,680 a year in respect of each of the poorest children, Humphreys announced a €4 per week increase for children under 12 and €8 a week for those aged 12 and over, worth €208 and €416 a year respectively.
These increases will be to the child support payment (formerly the qualified child payment) made in respect of each child of a parent or guardian dependent on social welfare.
Likewise, rather than increase the €33-a-week fuel allowance, paid between September and April to the poorest households, the department chose to distribute a €300 once-off lump sum to recipients.
Rather than increase the €22-a-week living alone allowance – a recognition of the increased financial strain faced by people who live by themselves – a €100 lump sum will go to them.
Measures that will make a welcome difference to struggling households include the extension of the hot meal programme to all primary schools from next year; the newborn baby grant worth an additional €280 for every new baby; and increases in income disregards for a number of welfare payments.
The once-off payments will be warmly welcomed, no doubt, as households face into long, cold winter months. But once they are spent, their recipients will be left in the new year with just modest increases at a time when inflation, though slowing, remains a serious, increasing challenge to anyone struggling to make ends meet.
The attraction of one-off lump sums from the department’s point of view is that once paid, the cost to the exchequer ends. In next year’s budget it will be far easier not to repeat them than it would be to cut increased core rates.
From the Coalition parties’ point of view, voters will no doubt feel some warm glow of extra money in their pockets, albeit short-lived, as a general election looms.