Government deceives public on social welfare cuts

A coalition of charities, community organisations and trade unions has asked the Taoiseach to assure immediately that no further cuts to social welfare payments or the minimum wage will be made. 'The Poor Can't Pay' coalition advocates the rights of the poor in Ireland and comprises groups such as Age Action, Barnardos, Social Justice Ireland and Focus Ireland. Today, the group published ‘How the Poor Were Made to Pay’, a detailed analysis of the effects of budget 2010 on those living in poverty. Members of the coalition took the opportunity today to criticise government's deception of the Irish public in relation to social welfare.

(Picture: Minister for Social and Family Affairs Mary Hanafin claims social welfare cuts were necessary)

The coalition’s report found that families living on social welfare who were living in poverty before the cut are now living in even deeper poverty. Spokesperson for ‘The Poor Can’t Pay’, Dr. Mary Murphy, said: “Many households will suffer multiple cuts. For those in receipt of social welfare and low paid workers, this comes on top of job losses and reduced hours. The sick and the elderly will also face new prescription charges”.

“The Government claims this was balanced out by the fall in prices but this is not true. The ESRI has confirmed that, because they buy different things, inflation has affected better off families and poorer families differently. Prices for poorer families have only fallen by 3 per cent over the year, while those for the better off fell by 5 per cent”.

In August of last year, Minister for Social Welfare, Mary Hanafin, T.D. revealed in an interview with RTE that a document was being prepared for Cabinet which would list all potential welfare cuts and outline the implications of each. However, this document has not been made public, despite calls from the ‘Poor Can’t Pay’ group to do so. 

Traditionally, as part of its National Anti-Poverty strategy, Government publishes the results of poverty briefings alongside the Minister for Finance’s budget statement on budget day. Mary Murphy said today that it can be assumed that the reason this failed to happen this year is because the results were not to the governments liking. 

Figures released by non-government bodies support the theory. 

A Population and Social Conditions report published last year by Eurostat shows that expenditure on social protection constitutes 18.2 per cent of GDP in Ireland, compared to an average of 27.5 per cent for the EU15 (states which were members of the EU before the accession ten new countries in 2004) and 26.9 per cent for the EU27 (all member states). 

Similarly, ‘Social Welfare: How Ireland Compares in Europe’, a report by the European Anti-Poverty Network in Ireland, reveals figures which appear contrary to government claims in recent months.

Some figures from the report:

  • An Irish single unemployed claimant receives the third smallest amount in benefits in the EU15.
  • Contrary to a statement by the Minister for Finance arguing that welfare recipients received an 8 per cent  increase in their income this year, when the changes to the rent supplement and the cutting of the Christmas  payment are taken into account, welfare recipients have actually seen a  decrease of 5 per cent in their  income for 2009. 
  • In 2006, the UK government spent 17.2 per cent more per person on social expenditure than Ireland.  Belgium spent 34.8 per cent more, Germany 21.9 per cent more, Austria 34.9 per cent more, Denmark 36.1 per cent more and Luxembourg 112.9 percent more.

Speaking about the apparent lack of political will to protect Ireland’s poorest people, Mike Allen, Director of Advocacy for Focus Ireland, said: 

“A huge effort was made by official quarters to send the message to ordinary people that people on social welfare were the best-off in Europe, that they’d had this huge increase over the last number of years and that they were much better off because of deflation and so on, none of which is true. I think that most Irish people would not want to see the people who are poorest in our society pay the price (for the financial crisis) but they were misled by a major PR exercise to believe that people could afford it. I think if people realised the circumstances of people living on the lowest incomes, the political will would be there.”

Politico asked the Department of Social and Family Affairs why the findings of their study were not published and if they would be published. We also invited the Department to comment on the Mike Allen’s claims that the public were “misled by a major PR exercise”. In reply, a Department spokesperson said that the government report referenced in this article applied to “an analysis of proposed cuts that were suggested in the McCarthy Report...the McCarthy Report made recommendations which stretch over a number of years and do not only refer to changes for 2010, and would therefore remain under consideration by the Cabinet”.

The Department also directed Politico to an address given by Minister Hanafin during the debate on the budget in the Dáil in which she said:

“Over the past 12 years, this Government has delivered unprecedented increases in welfare rates...Even throughout the economic difficulties of the past two years, the Government has done its best to prioritise social welfare...I appreciate that it is important to consider not just the overall change in the Consumer Price Index but also the impact that this may have on different groups”. 

“A Technical Analysis carried out by the Dept of Finance suggests that between Oct 2008 and Oct 2009, the CPI (consumer price index) fell by about: 

  • 3.25% for retired households; 
  • 5.75% for unemployed households; and
  • 7.5% for working households”.

“The Government appreciates that reductions in rates will be difficult for people but we also know that if action is not taken now we put social welfare payments at greater risk in future”. 

The Reality of the Budget Cuts: 

Politico spoke today spoke to two individuals, both living in poverty and both devastated by the cuts in the budget, cuts which have further decreased their chances of moving out of poverty. 

Orla Woods, a single parent of a teenage daughter from Dublin, told Politico that since she returned to Ireland 6 months ago, after 18 years in London, she has been struggling to manage financially, a struggle compounded by inefficiencies and cuts in the social welfare system. Despite being a trained Beauty Therapist, Orla is caught in a “catch 22 situation”. She says that under the current system, were she to get a job (probably earning little more than minimum wage), the resulting cut in her rent allowance would render her financial situation unviable. Orla was told that once she has been renting on social welfare for 18 months, then she will be eligible to work for 20 hours per week and receive rent allowance. However until then, the incongruencies in the social welfare system are essentially preventing her from working. 

Marie Gately also told Politico how cuts in December’s budget have had a catastrophic effect on her financial situation. After rent and utilities, Marie has €19 per week to look after her two year old child. Marie explained that were it not for help she receives from the St.Vincent de Paul and Focus Ireland, she would not be able to survive. Before Christmas, Marie was forced to take out a loan for €300, at 30 per cent interest, a situation she says she would not be in if the government had not cut the social welfare Christmas bonus. Marie said that she knows many people in similarly dire situations, and fears that many like her will feel forced to turn to crime if there are any further cuts.