Monday, December 5, 2011

Social welfare expenditure to fall by €88 million

Today seems like an appropriate time to update this.  The 2012 expenditure of the Department of Social Protection was subjected to €475 million of “savings measures” today.  It is projected that the full effect of the measures announced today but which will come into effect over the next three years will be €811 million.

In 2011 it is estimated that expenditure on social welfare payments from either the Department of Social Protection or the Social Insurance Fund will be €20,030 million.  With the measures announced today the forecast for 2012 is €19,942 million – a fall of €88 million. 

Here are the expenditures by six main headings for 2011 and 2012.

Social Welfare Expenditure

The actual payments under each heading were detailed in the previous post on this issue.  It can be seen that most of the expenditure increases are for pensions and in particular the contributory pensions paid from the Social Insurance Fund.

Around €45 million of the 2012 savings announced today are as a result of reduction in Child Benefit for third and subsequent children.  Even with this the aggregate amount of Child Benefit is forecast to increase (albeit by just €8 million) from €2,067 million to €2,075 million.

The large drop is income support payments from the Social Insurance Fund is evenly split between a fall in Jobseeker’s Benefit and Redundancy and Insolvency Payments.  The fall in Jobseeker’s Benefit is because entitlements expire after 12 months. Recipients can switch to the means tested Jobseeker’s Allowance paid by the Department of Social Protection where expenditure is forecast to increase by more than €150 million.

In 2009, the outturn for social welfare payments was €19,959 million.  As shown above it is forecast to be €19,942 million in 2012.  This is a drop of 0.08%.  Next year, social welfare payments will be 99.92% of what they were in 2009. 

It is clear there have been significant adjustments to social welfare expenditure and these cuts continued today.  However, there has been no reduction in overall expenditure.  Rather, the same amount of money is being spent but it is going to more people (more children, more pensioners, more unemployed) so, on average, people are getting less.

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