Jack Quann
Jack Quann

18.25 8 Oct 2019


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The Finance Minister Paschal Donohoe has defended no increase in personal social welfare rates in Budget 2020.

This sees pensioners stay on €248.30 a week and an invalidity pensioner on €208.50, among others.

But he told The Hard Shoulder on Newstalk: "For next year alone, we're going to have to set aside €365m of funding to deal with the affect that could happen on the Live Register if more people become unemployed because of a hard, no-deal Brexit.

"So that the choice I had to make was to make changes on social welfare today - but then find myself in a position next year that our overall social welfare bill would go dramatically up because those changes of today would be combined with a higher rate of unemployment tomorrow.

"So those citizens who still wouldn't be happy with that answer - you're right, the State pension can be difficult to get by on - we also announced the Christmas bonus today, and we've also made other changes in our social welfare package.

"Particularly for elderly people living on their own, to try to give them support in another way".

Presenter Ivan Yates said the last time the social welfare rates went untouched was in 2010, during the so-called 'Troika' budget.

Mr Donohoe said: "This is because in many ways, the situation that we find ourselves in is without precedent.

"In a couple of weeks time Ivan, I might be back on your show and we're dealing with a no-deal Brexit actually happening.

"If it's not in a few week's time, I might be on your show early in the new year - and we're looking at that risk all over again.

"And if we end up with a no-deal Brexit happening, what has happened in the past is all of these rates were changed even though many suspected bad things were happening but nobody knew they were definitely going to happen.

"There's a bad thing around the corner from us that could actually happen.

"And if I make changes now that I then have to undo after or before Christmas, the consequences for people - the consequences for how our country feels about itself - are as bad".

Minister Donohoe also confirmed the €1.2bn no-deal Brexit package he announced has yet to be approved by Brussels.

But he said: "We are absolutely confident that the way we would apply this money will get approved from Brussels in terms of dealing with State aid requirements."

This €1.2bn is separate to any EU funding Ireland could get in the event of a no-deal scenario.

The minister said he expects Ireland "would be in a position to significantly add to that fund" with EU support.

He also defended his potential use of the Rainy Day Fund: "The Rainy Day Fund is meant for a rainy day - and if a no-deal Brexit isn't equal to a rainy day, I'm not sure what is.

"I haven't hijacked it at all - my plan was to make €2bn into the Rainy Day Fund by the end of this year.

"€1.5bn of that will go into the Rainy Day Fund, which we would be able to use if a no-deal Brexit is even worse than I thought.

"There's a further €500m I have decided not to put in - and the reason for that is if a no-deal Brexit ends up happening, I'll have to borrow to put the money into the Rainy Day Fund".

Donohoe defends no social welfare increase in Budget 2020

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Brexit Budget 2020 Hard Shoulder Increase Live Register No Deal Brexit Paschal Donohoe Social Welfare Social Welfare Rates

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