FOLLOWING THE ANNOUNCEMENT of the government’s four year plan yesterday, TheJournal.ie has put together a digestible breakdown of how the cuts will be implemented, year by year.
Minimum Wage: The minimum wage will be cut by one euro an hour, from €8.75 to €7.75.
Income Tax: Adjustments will be frontloaded, with 65 per cent of the change being made in 2011. The tax base will be widened and tax bands and credits also altered.
Pensions: The relief offered on both PRSI and the health levy will be scrapped.
Social Welfare: Reductions are marked for social welfare – the details of which will be included in December’s budget. There will be €3 billion worth of cuts to social welfare expenditure by 2014.
Changes to the Child Benefit scheme to be introduced.
Existing funding relief for pensioners, in areas such as the TV licence fee and free travel schemes, will eventually be be frozen at 2010 levels.
Health: Payroll costs will be cut by €257 million and expenditure by €454 million.
Education: Third level students will have to pay flat rate contribution of €2,000. PLC students will have to pay €200. There will be a 5 per cent reduction in non-pay grants to institutions.
In primary and secondary education, there will be a 5 per cent cut in capitation grants – including adult literacy, school completion programme and Youth Reach. There will be €97.6 million worth of payroll cuts.
There will also be “operational efficiencies” and other “savings measures” applied to the school transport scheme.
Jobs: 7,000 staff will lose their jobs in the public service.
Pensions: New public service staff will be offered an altered pension scheme. Existing pensioners will have their payments reduced.
People over 65 will have to pay for passports (approx €80).
Income Tax: There will be changes to bands and tax credits.
Pensions: Pension relief will be reduced seven per cent – from 41 to 34 per cent.
Property Tax: An interim fixed charge of €100 will be introduced for all households.
Carbon Tax: Increased to €25 from €10.
Education: Further reductions in payroll costs. The numbers for Special Needs Assistants to be capped at 2011 levels.
Jobs: Another 8,600 public service staff will lose their jobs.
Income Tax: Further changes to bands and tax credits.
Pensions: Pension relief reduced by another seven per cent – from 34 to 27 per cent.
Property Tax: A value-based system will be introduced for property tax.
VAT: Increase of one per cent to the standard rate: VAT will rise to 22 per cent.
Jobs: Public service staff levels will be cut by further 8,600.
Income Tax: Further changes to bands and credits.
Pensions: The pension age to be raised to 66. (The pension will rise to 67 years in 2021 and 68 in 2028.)
Pension relief reduced another seven per cent – to 20 per cent.
Carbon Tax: Increased to €30 from €25.
VAT: Another increase of one per cent to the standard rate: VAT will rise to 23 per cent.
Jobs: Public service staff levels will be cut by further 14,650.
Full details of cuts contained in the plan will be disclosed in December’s budget.
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