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Homepage / Outside MAN / Budget 2020: Boost for families but pensioners miss out on €5 hike
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Outside MAN

Budget 2020: Boost for families but pensioners miss out on €5 hike

Robust talks: Kevin ‘Boxer’ Moran wanted detail on plans. Photo: Steve Humphreys
Robust talks: Kevin ‘Boxer’ Moran wanted detail on plans. Photo: Steve Humphreys
Kevin Doyle

Pensioners will not get a €5 top-up in Budget 2020 as the focus shifts towards families struggling with the cost of living.

Finance Minister Paschal Donohoe will tomorrow reveal details of a series of measures aimed at reducing ‘out-of-pocket expenses’ for parents.

However, the Irish Independent has learned that many of his announcements will not come into effect until well after the general election.

Free GP care for under-eights and free dental treatment for under-sixes won’t kick in until September 2020.

Increased subsidies for childcare are not expected until “very late next year”, possibly November.

Mr Donohoe is also planning an increase to the €1,500 tax credit given to couples where one parent stays at home to care for a child.

As part of a €130m social welfare package, low-income families with teenagers who receive the Qualified Child Allowance will see an increase on the current rate of €37 a week.

Meanwhile, the Help-to-Buy scheme, which is worth up to €20,000 for first-time buyers, is to be extended for another year. It was due to end on December 31.

As the final sums were being done last night, a row broke out between Mr Donohoe and the Independent Alliance over carbon tax hikes.

The four ministers who make up the Alliance met Mr Donohoe last night to sign-off on their support for the Budget but sources say the meeting “did not go according to plan”.

OPW Minister Kevin ‘Boxer’ Moran demanded to see what measures are included in the proposals to offset the impact of tax increases on rural Ireland.

He is understood to have demanded that money be ring-fenced specially for rural initiatives, including supports for workers who have lost their jobs with Bord na Móna.

Mr Moran confirmed to the Irish Independent there was a “robust conversation” and “a lot more discussion to go on”.

“I put questions to him and we’ll meet again to strike a deal. At this moment in time there are question marks for some of the things I want to see.”

The Westmeath TD asked why the Government isn’t targeting the aviation sector and providing a rebate for hauliers.

Despite the bust-up, it is expected that the Independent Alliance will come on board before the Budget is presented to the Dáil.

Minister Shane Ross is believed to be unhappy that there will not be an increase to the threshold for inheritance tax next year – but the issue is not a deal breaker.

His department has been given extra funding to help the tourism industry deal with the impact of Brexit.

Mr Donohoe spent much of yesterday discussing the Budget plans with Taoiseach Leo Varadkar.

Sources say that while Brexit will be the key theme this year, the Government is keen to put a major emphasis on helping families.

“The money won’t be huge because it’s not there this year – but whatever is available will go towards making things more affordable for families,” a senior Government source said.

The Finance Minister has now finalised negotiations with the majority of departments, including Social Protection.

It’s understood Minister Regina Doherty is to get €150m in ‘new money’. This is down considerably from the €360m extra she received last year, and has made across-the-board social welfare hikes impossible.

Fianna Fáil’s Willie O’Dea has repeatedly insisted that a €5 increase to the old-age pension is affordable – but this has now been taken off the table.

For the first time in three budgets, a source confirmed: “It won’t feature this year.”

Instead, Ms Doherty is to use her allocation to target vulnerable older people and children.

The Living Alone Allowance of €9 a week for older people is to be increased.

And the Qualified Child Allowance, paid to low-income families, will be increased from €37.

The hike will apply to children aged over 12 years.

And a Christmas Bonus will see all social welfare recipients get a double payment in December.

There will also be an increase in the weekly Fuel Allowance in order to counterbalance the carbon tax.

It is likely to be topped up by €2 per week but this was “up in the air” last night as discussion on the green tax continued.

Health Minister Simon Harris is to get the biggest budget increase of any department, meaning health spending will hit a new record next year.

However, much of the money will be immediately gobbled up to pay for wage increases for the more than 100,000 public servants working in the system.

Millions in extra funding will be made available to provide homecare packages but it will fall short of the €45m that is required to eliminate waiting lists for the service.

Discussions are also ongoing about how much additional funding can be spared for the Fair Deal scheme. It needs a boost of around €75m if waiting times are to be maintained at four weeks.

Prescription charge fees for the over-70s are to be reduced by 50c, while the maximum a family pays for medicine in a single month will be capped at €114 next year.

In the area of childcare, Minister Katherine Zappone is to get a significant increase ahead of the launch of the National Childcare Scheme at the end of the month.

Increases to the subsidies available to parents using crèche facilities will be announced but the money won’t come on-stream until late next year.

The Home Carers’ Tax Credit for stay-at-home parents will be increased in line with the subsidies.

Housing Minister Eoghan Murphy will get a renewed budget for the Help-To-Buy scheme even though some in his department are understood to have wanted it abolished.

Since its introduction in 2016, the scheme has helped almost 15,000 first-time buyers at a cost of €215m. House-hunters can claim up to €20,000 on properties valued at up to €600,000.

Changes to the threshold were discussed as part of the budgetary process but sources said they are likely to remain unchanged.

Over the weekend, Mr Varadkar described the scheme as an “enormous success” but added “some modifications” were needed to ensure it wasn’t subsidising couples who can already well afford to buy.

Fianna Fáil’s housing spokesman Darragh O’Brien last night told the Irish Independent that “in the absence of the implementation of the affordable housing scheme for first-time buyers, this grant must be kept”.

One of the final decisions to be made today will be a price hike for cigarettes of up to 50c.

There will be no excise increase for alcohol due to concern about cross-Border smuggling after Brexit.

Irish Independent

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