‘Brexit budget’ leaves poorest at biggest risk of losing out

Minister for Social Protection Regina Doherty put it plainly at her press conference after Budget 2020 was unveiled – if she had been able, she would have spent more, but with less money this year than last, she spent what she had on those most in need.

Children and older people in poverty, young people at risk of homelessness, carers and some people with disabilities all received modest increases – and that is welcome.

But it will be difficult to get away from the sense voiced by several groups on Tuesday that it is the poorest at risk of losing out most in this “Brexit budget”.

Minimum wage workers will be the first to feel it. Despite a recommendation – accepted by Cabinet – that the minimum wage should increase by 30 cent an hour to €10.10, Doherty said there would be no pay rise in the likely event of a no-deal Brexit.

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Despite reports that a disorderly Brexit would see the increase deferred only to March, Doherty said on Tuesday: “In a no-deal scenario we wouldn’t [increase it].”

Housing costs

In the context of spiralling housing costs, this will amount to a pay cut – a development described by the Irish Congress of Trade Unions as "reprehensible".

There will be no increase in any welfare benefit either – meaning nothing extra for pensioners, carers, widows, those with disabilities, farmers on farm assist, jobseekers and poorer families in need of extra help with back-to-school costs.

Again, in a context of increasing costs, these groups will likely have to rein in their spending in 2020.

Doherty explained her department had €360 million available for new spending in Budget 2019, but this had “fallen significantly” to €171 million for Budget 2020.

Some €520 million of the €690 million additional funding her department secured was needed just to fund demographic changes. And so she will argue she has been creative, focusing what she has on making the most effective interventions to ameliorate the worst impacts of a likely no-deal Brexit.

The poorest families with children will see small improvements by way of increases in the qualified child allowance – which is paid in respect of children in families dependent on welfare; increases in the income thresholds for lone parents and for low-paid workers with children; a €2 increase in the fuel allowance; and a significant expansion in the free hot school-meals programme.

In a context where Ireland is under pressure from both the European Commission and the United Nations to address child poverty – which is seen as a brake on economic development – the Government has to focus on this area.

Vulnerable older people too will see small reliefs with a €5 increase in the living-alone allowance to €14 a week and a broadening of eligibility for the household benefits package.

Young jobless

Younger unemployed people, who were effectively penalised in recent years simply for being young, will see their jobseeker’s allowance restored in full to €203 per week for those aged 25 and over, and in full also for those aged 18 to 24 living independently outside the family home. Members of the younger cohort still living at home will enjoy no increase over their current €112.70 per week.

Advocacy groups were variously critical of the “conservative” budget or cautiously welcoming of modest measures.

Active Retirement Ireland said it “could have gone further to protect the most vulnerable”, while Barnardos warned “an over-emphasis on preparing for a no-deal Brexit may lead to neglecting the needs of vulnerable children and their families”.

In a normal year, with no no-deal Brexit looming, Doherty might have been able to spend more, she said.

“You could have revenue raised or done other stuff but that just wasn’t an option this year,” she said.

“We had to make sure we were ‘calm and steady as she goes’ with regard to looking after the money that we have, spending it on the most vulnerable people and then batten down the hatches, ready and waiting, to protect people who haven’t yet been hit – hoping they won’t be.”