Budget Special Newsletter
Issued on December 15 2012
Budget Special Newsletter
DFI is calling on Government to ensure that the HSE Service Plan follows through on protecting access to services for people with disabilities
The Disability Federation of Ireland (DFI) has learned that savings of €5m (0.3 of 1% of Disability Budget) will have to be found through shared services, procurement and other initiatives amongst Disability Service Providers and Organisations. Furthermore, in Budget 2013 Government has committed to maintain Personal Assistant (PA) Services at 2012 Service Plan levels.
Despite these commitments the Department does acknowledge that the savings required globally from the Health Budget of €750 million will have an impact on all services across the HSE, including disability services, and the impact that this will have on the funding to disability services will be outlined in detail in the HSE Service Plan due to be published in the coming weeks.
DFI has broadly welcomed Minister Lynch's efforts to curtail the impact of the cuts in Budget 2013 on disability services. However, the disability budget in the HSE continues to be vulnerable to decisions yet to be made through the Service Plan on how to achieve the €750 m savings required.
Fresh in people”s minds is the experience of 2012, especially when key government budget plans failed to materialise; deficits mounted, and in the summer the Department of Health named cuts to services for people with disabilities. At the same time funds dedicated to mental health and other disability services were shifted to reduce the ballooning deficit incurred in other parts of the health system.
In relation to the income of people with disabilities, DFI acknowledges the maintenance of disability benefit levels in Budget 2013. However, the impact of a number of other measures that increase charges or reduce existing supports will, in DFI”s view, reduce the standard of living of many people with disabilities. These cuts impact across everyday living and cumulatively they further raise the costs of living with a disability. Budget measures of particular concern include:
- The annual Respite Care Grant has been reduced from a rate of €1,700 in 2012 to €1,375 for 2013.
- The deep cuts to the Household Benefits Package will directly affect people with disabilities as they often have additional costs in the areas of electricity, gas and telephone.
- The prescription charge for medical card holders has tripled from 50c to €1.50 per item. This measure will greatly affect people with chronic conditions and disabilities in need of monthly medication.
- The Drug Payment Scheme threshold has increased by 44% since 2010 where it was just €100. Budget 2013 announced yesterday another increase to €144. Families with a disabled child/adult not covered by the Long-Term Illness Scheme or Medical Card will be hardest hit.
Although disability benefit levels have been maintained people with disabilities income will be greatly affected by this Budget. There are threats of further cuts to vital disability services in the Service Plan. Moreover the level of need and number of people with disabilities is growing. DFI is calling on Government to ensure that the HSE Service Plan follows through on protecting access to services for people with disabilities.
Chief Executive Officer
Financial Impact of Budget 2013 for People with Disabilities
Revenue and Tax Credits
- Blind Tax Credit, Incapacitated Child Credit, Home Carer Credit cut by 10%.
- Introduction of the Universal Social Charge.
- Rental tax credits reduced by 20%
- VAT increased from 21% to 23% in 2012.
- Household charge of €100 introduced
- Carbon tax on petrol, diesel, oil and gas.
- A 63% cut to the Telephone Allowance since 2011 down from €25.91 per month to €9.50.
- Electricity and Gas Allowance cut with move to cash/cash credit payments instead of units.
- Respite care grant cut from €1,700 to €1,375.
- Child benefit cut Back to School Clothing
- Savings of €5m (0.3 of 1% of Disability Budget) to be found through shared services, procurement and other initiatives amongst Disability Service Providers and Organisations.
- Drugs Payment Scheme threshold increased by 44% since 2010 from €100 to €144 per month in 2013.
- Prescription charge for medical card holders tripled from 50cent to €1.50.
- No money to meet growing demand and waiting list for PA hours and Home Help.
- Allocation to VECs reduced.
- Pupil teacher ratio increased for PLC courses.
- Reduced financial supports for Further Education and Training scheme participants.
- Student contribution increased.
- Income threshold for student grants reduced.
Housing and Taxation
- Introduction of the Local Property Tax
- Cuts to the funding for housing adaptation grant schemes by 32% to €35 million
- Increased PRSI contribution for self-employed
- Introduction of carbon tax on solid fuels.
A total of €13.6b has been allocated to the health budget. This includes an additional €150m in funding.
Additional Savings to be made in 2013
Despite the extra allocation in funding provided to Health, just over three quarters of a billion Euro (€781m) in savings will have to be made in 2013 representing a major challenge for services. Half of that is to be achieved through cost efficiencies and reorganisation under public service agreements. The savings were outlined as follows:
- Reduction in the cost of Primary Care Schemes (€323m);
- Pay related savings (€308m);
- Increased generation of private income in public hospitals (€65m);
- Net savings on Department”s Vote (€60m);
- Savings on procurement (€20m);
- Other savings (€5m)
On Budget day it was announced that savings of €5m (0.3 of 1% of Disability Budget) will have to be found through shared services, procurement and other initiatives amongst Disability Service providers and organisations.
Minister Reilly”s also stated, “just over half a billion Euro in savings will have to be made next year representing a major challenge for services.” But no details have been provided yet about where these cutbacks will fall. DFI is advocating that disability services be protected from further cuts.
Minister Kathleen Lynch welcomed the commitment to restore the core community services of home help, home care packages and personal assistant hours. Community services were recognised as necessary “to keep people well at home, where they want to be, and out of hospital and residential care”.
DFI welcomes Minister Lynch”s announcement of the commitment to restore the core community services but experience on the ground needs to be monitored closely to ensure people benefit.
There is little recognition by the Government of the unmet need in community services. particularly in demand for new home help and PA hours noted in the NPSDD Annual Reports. For example as many people are waiting for PA service as currently receive it.
Prescription Charge and Drug Payment Scheme
- The Prescription charge has been tripled from 50c to €1.50.
- The monthly threshold for the Drugs Payments Scheme is being increased from €132 per month to €144 per month with effect from 1st January 2013. The estimated saving to the Exchequer of this measure is €10m.
The increase in the prescription charge for medical card holders unfairly targets people with chronic conditions and disabilities in need of monthly medication. It will also increase the burden of those trying to live with additional costs of disability.
The Drug Payment Scheme threshold has increased by 44% since 2010 where it was just €100. Families with a disabled child / adult not covered by the Long-Term Illness Scheme or Medical Card will be hardest hit.
- The allocation of a further €35m for mental health servicesand in line with the blueprint set out in “Vision for Change is to be welcomed.
- Minister Kathleen Lynch pledged that she will be engaging with the HSE directly to ensure that the developments to be put in place with this additional funding are fully reflected in the National Service Plan for 2013.
The key challenge will be that the funding is targeted and used as it was intended to improve mental health services, in contrast to the experience of 2012
Free GP care for people with certain prescribed illnesses
DFI welcomes that €15m necessary to provide free GP care for people with certain prescribed illnesses which had been committed in Budget 2012. But many disabling conditions will still not be covered.
Other Positive Measures:
- DFI welcomes the significant savings to be made in relation to the cost of prescribed drugs and medicines, on foot of a new agreement with the Irish Pharmaceutical Healthcare Association (IPHA). This is expected to bring in savings in excess of €400m over the next three years.
- Qualified nurses will be offered the opportunity to apply to take part in a placement programme in the health services for a specific period. DFI hopes that voluntary service providers can benefit from much needed nursing to meet demands in certain areas in the disability sector.
Expenditure on social welfare payments and services will reach €20.8 billion in 2012 and expenditure in 2013 is expected to be €20.26 billion. The rates for all core weekly payments will not change however cuts to important cost of disability measures will significantly impact people with disabilities.
DFI welcomes the fact that people with disabilities will continue to get their basic payments at current levels. There are no changes to the Fuel Allowance, Free travel and Free Television Licence whose values are being maintained. However people are adversely affected by the cuts announced to the Household Benefits Package and the Respite Care Grant.
The Household Benefits Package
The followings cuts were announced:
- The value of the Telephone Allowance has been reduced by half. The new monthly rate is €9.50 per month down from €22.60 in 2012.
- The Electricity/Gas Allowance has been readjusted so that the same amount is paid regardless of whether it is winter or summer. The standard rate of €35 per month will show as cash credit for those who receive a bill or be paid as a cash allowance.
The telephone and Electricity/Gas Allowance are important cost of disability measures, and this is the second cut to the telephone allowance and electricity/gas allowance in the past two years.
In 2011 the Telephone Allowance was cut from €25.91 per month to €22.60 and now to just €9.50 per month, representing a cut of 63% on the 2011 allowance.
The hardest hit by the cut in the Telephone Allowance will be people with disabilities who live in institutions and those who are isolated at home. People with chronic conditions and older people will also be impacted severely.
In addition, the Electricity and Gas Allowance have already been cut in 2011. The electricity cash payment was reduced from €43.80 a month to €35.80 a month and the equivalent annual value of the Gas Allowance was also adjusted from €489 to €393. Heating is critical for many people with disabilities, and these serial cuts impinge on their basic standard of living.
- DFI welcomes the fact that the half-rate Carers Allowance has not been cut and will continue to be paid to full-time carers who are also getting another social welfare payment.
- The weekly rates of Carer's Allowance and Carer's Benefit will also be maintained in 2013, and carers who are caring for more than one person will continue to retain the extra weekly payment that they receive.
- The Department will continue to pay the annual Respite Care Grant to carers however this has been reduced from a rate of €1,700 in 2012 to €1,375.
The 20% cut in respite grant is unacceptable for families, who already incur significant disability related costs. DFI is strongly opposing this cut, as inhumane and short-sighted.
Older people will continue to get their State Pension at current levels. There are no changes to the Fuel Allowance, Free travel, Free Television Licence, Over 80 Allowance, Islander Allowance and the Living Alone Allowance. Their values are being maintained. However they are impacted by the cuts announced to the Household Benefits Package.
Minister Burton announced that she is providing an extra 10,000 work activation places for social welfare customers next year. This investment is, according to the Minister, “consistent with this government's priority of getting people back to work or getting them back to education or training so they will improve their chances of getting a job in the future”. She also describes this as a “progressive first step on the road to building a social protection system that will ultimately provide our citizens with better services."
The employment programme measures, which will cost €11 million are:
- Increasing the number of JobBridge Internships by an additional 2,500 places at a cost of €2 million;
- Providing an additional 2,500 Tús places, which will cost €4.6 million;
- The Community Employment Programme is to get 2,000 extra places at a cost of €2.96 million.
- In addition to these, €1.44 million will be made available for a new Local Authority Social Employment Scheme with 3,000 places.
Job activation is important because unemployment amongst people with disabilities is very high (31% compared to 19% of the general population according to Census 2011). The modest measures announced in the Budget need to benefit people with disabilities as much as for others without work.
DFI is concerned at the consistent pattern of announcing new activation measures that are open to jobseekers but not those on disability payments.
DFI lobbied to change criteria on the JobsBridge and Tús Schemes so that they are now accessible to people on disability payments.
However the same limited criteria has been applied to Intreo, “the new FÁS” or one stop shop for all employment and income supports now being rolled out by the Department.
In this context, DFI has serious concern the new Local Authority Social Employment Scheme will not be open to people on Disability Allowance or those on other disability related payments. We intend to follow up with the Department on this issue.
There will be changes to the Jobseeker's Benefit scheme.
- From 3rd April next, the length of time during which people can avail of this scheme is being reduced from 12 months to 9 months for people with 260 or more PRSI contributions paid and from 9 months to 6 months for people with less than 260 PRSI contributions paid.
- Recipients of Jobseeker's Benefit who, on the 3rd April 2013 have been receiving a payment for 6 months or more (or 3 months in the case of those with less than 260 contributions paid) will not be affected.
Minister Burton announced the “Children Plus Initiative” to provide a range of childcare and child welfare provisions in 2013. The total cost is to be €18.5 million. The initiative will comprise:
- Over 6,000 afterschool childcare places for children in primary school from low income backgrounds where parents are availing of employment opportunities. It is a joint initiative with the Department of Children and Youth Affairs (€14m);
- An additional €2m is being allocated to school meals programme to provide regular, nutritious food to disadvantaged children;
- €2.5m in funding will be allocated to the Department of Children and Youth Affairs for its Area Based Child Poverty Initiative. This is a joint initiative targeting key areas including child development, educational disadvantage, health, well-being and parenting.
Disadvantage due to disability extends beyond areas of deprivation. These measures need to be monitored in terms of mainstreaming and ensuring that the afterschool places are accessible to children with disabilities and to ensure parents with disabilities can access the childcare premises.
The rate of Child Benefit has been cut since 2010 impacting on all families including those where the head of the household has a disability and is already at risk of poverty.
There has been a 22% cut to Child Benefit since 2010 for those with 1 or 2 children, equivalent to €36
Larger families are more at risk of poverty and yet there has been a cut of between 31%-32% for families with 3 or more children in the same time frame with further reductions planned for 2014.
This is despite evidence that social transfers including child benefit have been effective in combating child poverty in the past (SILC, 2010).
In particular, households where the head has a disability are three times more likely to be at risk of poverty (SILC, 2010). The reduction in Child Benefit will push them into greater hardship.
Back to School Clothing and Footwear Allowance
The Back to School Clothing and Footwear Allowance will be reduced by €50 from €150 to €100 for children aged between 4 years and 11 years. It will be reduced by €50 from €250 to €200 for children aged 12 years to 17 years or aged 18 years to 22 years if in full-time education.
Back to Education Allowance
- The Cost of Education Allowance (currently €300) payable to Back to Education Allowance participants will be discontinued for new and existing participants. (2013)
- The weekly rate payable to new Back to Education Allowance participants will be equal to their previous social protection payment. (1 January 2013)
- A standard maximum rate of €160 per week will apply to new Back to Education Allowance participants who were previously getting an age-related reduced rate of Jobseeker's Allowance. (1 January 2013)
Primary and Secondary Education Pupil Teacher Ratio
- The pupil teacher ratio for primary and secondary schools remains unchanged at 28:1 and 19:1 respectively.
- The pupil teacher ratio for fee-paying post-primary schools will increase by 2 points, from 21:1 to 23:1 from September 2013.
- No reduction in the number of Resource Teachers or Special Needs Assistants (SNAs). There will be 9,950 Resource Teacher positions and 10,575 SNA positions for the 2013-2014 school year.
- No overall changes to staffing levels or funding for disadvantaged schools in the DEIS (Delivery of Equality of Opportunity in Schools) scheme.
- Measures are also being taken in order to reduce the substitution costs for teachers and Special Needs Assistants (SNA) in schools, with effect from May 1st 2013.
Further Education and Training
- The allocation to VECs will be reduced by €13.2 in 2013 which is not expected to reduce service levels.
- The pupil teacher ratio in Post Leaving Certificate (PLC) programmes increased by 2 points, changing from 17:1 to 19:1, to bring it in line with the pupil teacher ratio in mainstream second level schools, with effect from September 2013. The number of PLC places should not be affected.
- From January, participants on the Vocational Training Opportunities Scheme (VTOS), Youthreach and FÁS further education and training programmes who move from Jobseeker”s Payments will no longer have their new payments increased to the maximum €188 per week, if their jobseeker's payment is less than this. However, people under 25 who were getting an age-related reduced rate of Jobseeker”s Allowance will get a standard maximum rate of €160 per week.
- The student contribution at third level will rise by €250 in 2013 to €2,500 and by €250 for the following two years to a maximum of €3,000 by 2015.
- The income thresholds for entitlement to the student grant are reduced by 3% for people qualifying in 2013. It will see the threshold for the maximum standard rate of grant reduced from €41,110 to €39,875.
- HEIs will have their allocation reduced on a one off basis by €25 million. The Minister is requesting the Higher Education Authority to ensure that this measure will not impact on frontline student services.
Labour Market Activation
€48 million has been provided in the National Training Fund for labour activation measures for the unemployed and targeted skills training in 2013.The National Training Fund expenditure will provide:
- €20 million under the Labour Market Education and Training Fund to provide 6,500 places in 2013 for people who are long-term unemployed
- €23 million for the Springboard initiative to increase the part-time higher education opportunities for unemployed people
- €5 million for a second phase of ICT Skills Conversion courses
Resourcing Special Projects
- The Literacy and Numeracy Strategy will continue to be rolled out.
- The overhaul of the Junior Cycle will be supported by an investment of €3 million in 2013, and €8.7 million in 2014.
- The roll-out of high speed broadband will continue.
- The Schools Building Programme will continue for new schools and major extensions.
DFI welcomes the fact that the numbers of Special Needs Assistants and Resource teachers will not be reduced in 2013.
The continued role out of the National Literacy and Numeracy Strategy is positive.
DFI will seek further clarification to ensure that the activation programmes announced are accessible to all people with disabilities, including those on disability payments.
The increase in the student contribution will be even harder for students with disabilities who already incur additional costs of disability.
The housing budget provides a €310m allocation in current spending while €275m will be invested through capital expenditure in 2013.
It has been estimated that in excess of 5,000 units will be provided for social housing in 2013. This will include:
- 350 units for people with special housing needs
- 150 units specifically for people leaving institutional care
- An additional 400 permanent homes delivered through capital expenditure under the Social Housing Investment Programme
- 300 transfers under the Mortgage to Rent Scheme
- Some 4,000 units will be delivered under social leasing, including property transfers from NAMA, the Rental Accommodation Scheme (RAS) and mortgage to lease.
The Congregated Settings Implementation Plan is reflected in the commitment to supply 150 units for people leaving institutional care.
Budget 2013 cuts the funding for housing adaptation grant schemes by 32% to €35 million, despite repeated Government assertions that this was a priority area because it enables people to remain in their own homes. Stricter targeting of grants is likely to result, with more people in need denied assistance.
DFI is aware that there are to be no additional new build projects to accommodate people with disabilities under CAS (i.e. the 350 are already approved and target the homeless and elderly).
The 400 permanent homes under the SHIP will most likely be leased arrangements and bank cooperation is an issue.
The 300 transfers under the Mortgage to Rent Scheme will be taken from the social housing budget.
Source: PWC (2013) Exploring what it means for you Budget 2013. http://www.pwc.ie/budget/index.jhtml
As expected there were no increases to corporate or income tax rates. Property, PRSI, alcohol, cigarettes, cars and capital taxes made up the bulk of the tax adjustment. After the increase from 21% to 23% in Budget 2012, Ireland currently sits almost two percentage points above the EU average.
PRSI and Universal Social Charge (USC) Changes
The following changes will be made to self-employed and employed:
- The minimum amount of PRSI contribution for a self-employed individual will increase from €253 per annum to €500 per annum
- The weekly employee PRSI exemption of €127 will be abolished. This will mean that on average, employees will pay an extra €5 per week, €22 per month or €264 per year in PRSI.
- The reduced rate of USC which applies to medical card holders and those over 70 years old will be discontinued from 1 January 2013 for those with income in excess of €60k per annum.
From January 2013, the Employee's PRSI-Free Allowance of €127 per week (for those paying PRSI Class A, E and H) and €26 per week (for those paying PRSI Class B, C and D) will be abolished.
Self-employment is an important means for people with disabilities to work. These changes will adversely affect the self-employed who have additional costs of disabilities and are not entitled to any Cost of Disability tax credit or payment. In addition, it may discourage disabled people from considering this route into employment.
There was no change in the standard rate of VAT (23%) which is welcomed news for those with additional costs of disability. Any hike would have increased the cost of consumer goods such as food and clothing.
Motor Tax Increases
Motor tax has been increased by 12% which is a significant rise and will impact on family income.
Local Property Tax
- Local Property Tax was introduced to meet the goal of broadening the tax base while minimising the impact on economic grown and employment.
- The rate of the property tax will be 0.18% with the higher rate of 0.25% on values over €1m.
- Self-assessment on the value of the home will apply and deferred payment will be a possibility.
The Budget related legislation makes virtually all local authority and voluntary housing association housing liable to property tax, unless appropriately amended. This will cause a significant burden on the delivery of this type of housing which is so important to support independent living for disabled people in their community.
Although the rates of property tax are lower than was widely expected (and certainly much lower than the 0.5% initially suggested by the IMF), its impact on property owners, in particular the lower paid and those in negative equity, should not be underestimated.
In addition, from 2015, local authorities will have the power to vary rates by 15% above or below the central national rates.
Carbon tax will be introduced on a phased basis on solid fuels.
This will increase the cost of heating for disabled people who rely on this type of fuel, most likely in rural areas. However, the impact will not be felt until after this winter.
Overall, fundraising has been given a boost in this Budget with Charities hoping to gain €18m from changes to donations scheme.
Source: Irish Charities Tax Research (ICTR)
Donations made via the revenue commissioner”s tax relief scheme currently contribute €30million annually to charities. With the changes outlined in the Budget, the Irish Charities Tax Research estimate that charities will benefit by a further €18 million annually. In practice it means that for every €2 donated by the public to a charity via the scheme, the government will effectively add a euro “top up”.The change will be cost neutral to the Exchequer as the relief will be simply diverted to the charity instead of refunded to the donor.
- DFI welcomes the valuable recognition of work of charities
- The measures should help incentive and promote professional fundraising practices.
- It will help give autonomy for more organisations from state funding
- DFI emphasises however that charitable / voluntary activity is no substitute for the State”s responsibility to provide essential services.
For information please contact the relevant organisation directly
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The Disability Federation of Ireland (DFI) represents the interests and the expectations of people with disabilities to be fully included in Irish society. It comprises organisations that represent and support people with disabilities and disabling conditions.
The vision of DFI is that Irish society is fully inclusive of people with disabilities and disabling conditions so that they can exercise their full civil, economic, social and human rights and that they are enabled to reach their full potential in life. DFI”s mission is to act as an advocate for the full and equal inclusion of people with disabilities and disabling conditions in all aspects of their lives.
There are over 130 organisations within membership, or as associates, of DFI. DFI also works with a growing number of organisations and groups around the country that have a significant disability interest, mainly from the statutory and voluntary sectors. DFI provides:
- Training and Support
- Advocacy and Representation
- Research and Policy Development / Implementation
- Organisation and Management Development
DFI works on the basis that disability is a societal issue and so works with Government, and across the social and economic strands and interests of society.
For further information go to www.disability-federation.ie
Disability Federation of Ireland, Fumbally Court, Fumbally Lane, Dublin 8
Union of Voluntary Organisations of People with Disabilities trading as The Disability Federation of Ireland is a company limited by guarantee not having share capital, registered in Dublin. Registered No. 140948, CHY No 6177