Belfast Telegraph

Tuesday 22 July 2014

Republic eyes state pension in cuts drive

Taoiseach Brian Cowen was engulfed in a backbench revolt last night after he gave his strongest indication yet that the Republic's old age pension would be cut in the Budget.

Savage cuts to the pension, child benefit and other welfare benefits are being planned by the Government in a bumper first instalment of the 15bn euro four-year plan to slash the deficit.

Increases in the levels of income tax and social insurance being paid by workers are also on the cards.

The state pension was spared from the axe last year, even though most other social welfare payments were cut.

Following the revolt two years ago over the abolition of the automatic entitlement to a medical card for the over-70s, Fianna Fail TDs are still nervous about doing anything to upset pensioners, who tend to be the most loyal supporters of the party.

Fianna Fail backbenchers last night told Mr Cowen and Finance Minister Brian Lenihan they accepted many areas of public spending were "fair game".

But the old age pension was not one such area, TDs and Senators said at last night's parliamentary party meeting.

Fianna Fail Longford-Westmeath TD Mary O'Rourke was the first to speak up after Mr Cowen's opening address to the meeting and she focused heavily on the pension issue.

There is a growing sense within the coalition that the four-year super-budget plan will be highly detailed, meaning the key decisions will be taken by the middle of November, rather than the closing days of budget preparation in early December.

"Budget day will possibly be a damp squib. It's up to the Government to decide how detailed," a Government source said.

Defending the Government's decision to opt for a cut of 15bn euro over the next four years, the Taoiseach also said there will be more spending cuts than tax increases in the budget.

Mr Cowen pointed out the contributory state pension rose by 38% over the past five years.

"Given the budgetary crisis, I do not believe that we can protect every aspect of health, education and social welfare spending," he said.

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