Tax revenue for 2009 was €1.357 billion less than forecast last April. There was some silver lining – corporation tax was €160 million higher than anticipated and this is attributable to foreign direct investors.
Welfare Trends 1989 – 2008
The 20 years between 1989 and 2008 have seen Ireland’s welfare bill grow from €3.38 billion to €17.81 billion. Expressed as a percentage of gross government expenditure, welfare has grown from 27.3% in 1989 to 33.4% in 2008.
During the decade from 1989 to 1998 the Index of Welfare Expenditure increased by 78.9 percentile points – compared to an increase in the Consumer Price Index of 23.6%
The comparable figures for the decade from 1999 to 2008 saw the Index of Welfare Expenditure increase by 183.5 percentile points in a period when the Consumer Price Index increased by 42.4 percentile points.
Welfare Trends 1999 – 2008
The Irish population increased from 3.7 million in 1999 to 4.4 million in 2008, an increase of 19.4%. This compares to an increase in total welfare spending from €6.28 billion to €17.81 billion.
The pattern of welfare spending has evolved:
|Widows, Widowers and 1-parent families||18.0%||14.0%|
|Child Related Payments||9.7%||15.7%|
|Illness, disability and caring||14.1%||18.5%|
Maternity Benefit changes
Increases in the maximum duration and maximum payment of Maternity Benefit have resulted in significant increases in this category of expenditure. In March 2006 the maximum duration of Maternity Benefit, Adoptive Benefit and Health and Safety Benefit claims was increased from 18 to 22 weeks, with a subsequent extension of Maternity Benefit in March 2007 to 26 weeks.
The cost impact of changes in these three categories of benefit is reflected in an increase from €48.79 million in 1998 to €318.09 million in 2008 (+551%). The number of beneficiaries during this decade has increased from 5,483 to 23,558.
The number of beneficiaries of this benefit has shown a significant increase – from 170,927 who received €307 million in 1998 to 233,620 who received €1,067 million in 2008.
The cost of ‘free schemes’ have also increased significantly
|FREE ~ fuel, electricity, bottled gas, natural gas, television licence, telephone rental||153,358||584,674|
|Social Insurance Fund||44%||47.1%|
|Components of Social Insurance Fund|
|Employer PRSI contributions||71%||73%|
|Employee PRSI contributions||23%||20.1%|
|Population of Ireland||3,703,100||4,420,000|
|Number of welfare recipients||854,000||1,208,800|
|Number of beneficiaries||1,414,119||1,799,875|
|Percentage of population receiving welfare||38.1%||40.7%|