A new swathe of welfare cuts is in prospect as preparations for Budget 2014 next Tuesday move into their final phase.
Under examination is the possibility of cuts from the gas, electricity and telephone allowances under the household benefit package for pensioners and people with disabilities. Cuts to entitlements under the package this year aim to yield €84 million.
With headline welfare rates not threatened, the focus is on secondary benefits.
However, cuts to the free travel scheme for pensioners are unlikely. Equally unlikely are cuts to the free television licence scheme.
The budget allocation to Minister for Social Protection Joan Burton was said last night to be close to agreement but there was still no final deal. She was directed at the outset of the process to extract €440 million from the welfare budget but the target has been reduced and she is now battling to keep the cuts below €300 million.
However, Ms Burton and her supporters in Labour remain under Fine Gael pressure as the larger party wishes to direct the benefit from a softer budget than expected towards frontline health services. The Government has settled on a €2.5 billion budget adjustment; €600 million less than the troika's original target.
Spending overrun
However uncertainty over a health spending overrun this year of up to €150 million or more, continues to cloud the budgetary arithmetic.
Minister for Public Expenditure Brendan Howlin had told Minister for Health James Reilly he would not receive a supplementary estimate to bridge the funding gap and would instead have to make up the difference next year.
However, the possibility of a supplementary estimate appeared to open up yesterday. This reflects the fact any move next year to compensate for this year’s overrun would worsen the cuts to be extracted from the health service. This would be at odds with Fine Gael’s push to protect frontline services in health.
The Cabinet has been called to a special meeting this morning in Government Buildings and to another one on Sunday.
