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Social welfare rates 'far in excess' of UK's (Irish Times)

04 November 2011

Irish social welfare payment rates "are now far in excess of their UK equivalents", according to an internal Department of Finance memorandum seen by The Irish Times .

"Our State pension (contributory) is 94 per cent higher than the UK; jobseekers' benefit is 160 per cent higher and child benefit rates are 60 per cent higher," the memorandum continues.

The memorandum shows that public spending on social welfare has risen by more than €10 billion since 2000. Spending on social welfare programmes has grown from €6.7 billion in 2000 to a projected €16.9 million this year, an increase of 154 per cent.

Irish Gross National Product (GNP) in money terms has advanced by 77 per cent since 2000. As a result, public spending on social welfare has risen twice as fast as GNP since the beginning of the decade.

The memorandum says that, while social welfare benefits are now much higher in Ireland than in Britain, "Irish PRSI rates to help fund these higher rates are significantly lower than in the UK".

The memorandum states: "A sustained upward trend in public sector numbers since 2000", combined with a significant expansion in non-pay spending "means that the existing baseline for expenditure on public services is now at a historically high level in real terms".

The numbers employed in the public sector increased by over 75,000 or by almost one-third between 2000 and 2007, the memorandum shows. By 2007, the public sector workforce numbered 308,800 people compared to 233,300 seven years earlier.

Most of the additions to the public sector payroll since 2000 have been in health and education. Between 2000 and 2007, employment in the health service grew by over 33,000 people, or by 46 per cent. In education, more than 23,000 employees were added to the public sector workforce, an increase of 35 per cent over the seven-year span.

The memorandum can be seen as making the case for further reductions in the pace of public spending growth in the 2009 Budget. Earlier this month, the Government announced a programme of expenditure savings designed to reduce public spending by €400 million this year and by €1 billion in 2009.

However, by themselves, these savings are unlikely to prevent the Government from breaching the EU limits on budget deficits next year. Other than in exceptional circumstances, the EU Stability and Growth Pact requires that governments keep their overall budget deficits below 3 per cent of Gross Domestic Product.