EMERGENCY BUDGET 2009 APRIL 7TH

St. Agatha's 16th April

The Context• Due to the economic situation the

Minister for Finance, Brian Lenihan announced a supplementary budget on the 7th of April 2009.

• There already was an early budget - 14th of October 2008, six weeks earlier than usual.

• Usually there is one budget in a 12 month period and it is normally announced on the first Wednesday in December

The Budget: key measuresFor individuals

For servicesFor the community and

voluntary sector

IMPLICATIONS FOR INDIVIDUALS:

SOCIAL WELFARE• The Christmas bonus will not be paid

this year. This is an effective 2% cut in social welfare.

• Those under 20 will have their job seekers payments halved, (new claimants from April 28th)

• Intensive campaign against welfare fraud

IMPLICATIONS FOR INDIVIDUALS:

SOCIAL WELFARE• Changes to rent supplement

eligibility and payment regime- will result in payments being reduced.

• Early Childcare Supplement monthly payment to be halved to €41.50 per child with effect from 1 May 2009 and abolished at end-2009.

Childcare• The Early Childcare Supplement will be

replaced in January 2010 with a pre-school Early Childhood and Education Scheme (ECCE) for all children between the ages of 3 years 3 months and 4 years 6 months.

• A capitation grant will be payable to service providers who provide free pre-school services.

• How will this work?

IMPLICATIONS FOR INDIVIDUALS:

SOCIAL WELFARETHE FUTURE

• Indicated the taxation and/or means testing of child benefit

• There will be no increases in social welfare for the next couple of years, and rates may be reviewed later. (This implies downward)

IMPLICATIONS FOR INDIVIDUALS:

TAXATION• The income levies have been doubled

and the thresholds have been lowered. • The 2% rate kicking in at €15,000, 4%

at €75,000 and 6% at €175,000. • This means that you will pay 2% on all

gross income once you earn €15,000.• The levies will be integrated into the

PAYE system in next December's budget.

• Exempt if you have a full medical card

IMPLICATIONS FOR INDIVIDUALS:

TAXATION• Health levies rates will doubled (paid as

part of PRSI). The health levy rates will double to 4% and 5%. The entry point to the higher rate will be €75,036. 

• The ceiling for employee PRSI will rise from €52,000 to €75,000.

• Mortgage interest relief will be discontinued for any mortgage over 7 years from 1 May. 

PRICE INCREASES

• The prices of cigarettes up by 25 cent a packet•Diesel goes up five cent a litre.

GENERAL BUDGET POINTS: GOVERNMENT

• All 20 Ministers of State are to resign on April 21. 15 will be re-appointed on the 22nd of April.

• A 10% cut in political expenses, long-service payments to TDs to be abolished.

• No more Ministerial pensions when still serving.

• Various payments to chairs of committee reduced.

• Teachers on leave in the Dail will no longer get the difference between the salary they were on the salary of those in their teaching post.

GENERAL BUDGET POINTS

• The Government plans to set up an asset management agency to take bad loans off the banks' balance sheets. To be called the National Asset Management Agency (NAMA).

• An Enterprise Stabilisation Fund will be set up to help protect jobs in troubled businesses

• Reduction in Overseas Development Aid of 100m

GENERAL BUDGET POINTS

Civil Service• There will be a new scheme to allow civil

servants over the age of 50 to retire. The scheme will begin in May. Those retiring will not be replaced unless sanctioned by the Department of Finance. Open for applications from May 1st

• Ban on recruitment and promotion• A review of top-level public sector pay

rates.

SERVICE IMPLICATIONS

OVERALL CUTS• Reduction of 1.5 billion in

public spending cuts• Shaper targeting of

programme spending (Minister’s words)

SUMMARY FROM GOVERNMENT DEPARTMENTS - COMMUNITY, RURAL &

GAELTACHT AFFAIRS • Cuts across various areas, including

supports for the community and voluntary sector and local and community development programmes. €15m for 2009 and €20m for 2010

• The suspension (from 7th April 2009) of the Scheme for Community Support of Older People

• The suspension (since end-February 2009) of the Once-off Grants for Locally-Based Community Groups. 

SUMMARY FROM GOVERNMENT DEPARTMENTS

EDUCATION & SCIENCE• Cuts include reductions in funding for

the third-level sector • Cuts in the administration and

operation of the school transport scheme

• Cuts on teachers’ pay• €54 million savings, mainly in the

Primary and Post-Primary School Building Programmes

• Previous announcements: Special needs and language teachers reduced, classes sizes increased

SUMMARY FROM GOVERNMENT DEPARTMENTS ENVIRONMENT,

HERITAGE & LOCAL GOVERNMENT

• €200 million cuts, principally arising in the areas of Social Housing and Water Services Infrastructure as well as other programmes.

• Dublin City Council announced a total of €30m in cuts to services (6 April 2009)

• Cutbacks to road and housing maintenance as well as restrictions on opening times of council facilities such as recycling centres.

COMMUNITY DEVELOPMENT PROGRAMME

• 6% cuts for 2009, advised in December 2008• Further cuts to CDP projects of approximately

€1.5million in the overall allocation to CDPs and other groups funded under the Community Development programme.

• There are 184 CDP projects nationally• The department have stated, at this stage,

that there will be cost savings but that the programme can continue to the end of the year with minor changes.

LOCAL DEVELOPMENT AND SOCIAL INCLUSION

PROGRAMME • Cut of est. 10 % for 2009 announced

prior to the budget• As a result of the budget estimated

further cuts of €3 million on the LDSIP programme which funds 55 projects (including the Partnerships)

• How the cuts to the CDP or LDSIP are to be carried out has not been announced?

National Drugs Strategy

Announced in the run up to the budget• National Drugs Strategy team to be

disbanded by the end of April• In the interim the Local Drugs Task Forces

are working with officials from the Drug Strategy Unit of the Department of Community, Rural & Gaeltacht Affairs to secure funding for the remainder of this year

• Future strategy to establish a new unit within the department. How will this work?

North Inner City Drugs Task Force

• Covers two north side network areas (ICON and NWICN)

• NICDTF funded projects employ an estimated 55 people across 40 different actions in response to local drug related problems

• Estimated costs €2.5 million per annum• Est. cut backs for this year (on top of

earlier cut backs) 6% to the end of the year.

To note

• Pobal significant cuts in its budget - cut staffing levels by a third. The cuts have been directed at those sections of Pobal engaged with development and support, particularly in relation to the LDSIP.

• The Department of Community, Rural and Gaeltacht Affairs (DCRAGA) signed a contract with the Centre for Effective Services

To note

• The Department appears to be looking at increasing links between the RAPID the Community Development Programme and the LDSIP • Cohension strategy• CDP review of projects

Community Sector

• This year 2009, small but significant cuts and changes in organisation and/or reviews

• Signalled are significant public expenditure cuts for 2010

• What will these be and mean for the Community sector?