The International Monetary Fund has ordered the Irish government to slash dole payments, cut child benefit, and take the automatic right to a medical card away from old age pensioners.
The IMF also wants the government to introduce a hard hitting property tax as it seeks a return on its investment in Ireland.
The proposals have come from the IMF in a hard hitting directive ahead of the government’s December budget.
The IMF is currently bank rolling Ireland’s economic bail-out along with the European Union and their latest orders have been met with harsh criticism from opposition groups and trade unions.
IMF bosses, in Dublin for their regular review of the Irish economy, ordered the Government to cut high social welfare benefits to encourage people back to work.
They warned: “Dole payments are high by international standards and responsible for low exit rates from the Live Register.
“With the Irish economy to grow by just 0.5pc this year, certain welfare payments should be means-tested to avoid long-term unemployment.”
The Irish Independent reports that the Washington based IMF admitted it has targeted a ‘few low-hanging fruits’ for cuts.
It also said that future Irish budgets need to focus on ‘efficiency and fairness’.
The body’s Mission Chief for Ireland Craig Beaumount unveiled a stark assessment of what the IMF expects to see in December’s budget.
He outlined what the paper called a ‘series of unpalatable options’ to cut spending while protecting the vulnerable.
Beaumont specifically mentioned removing the universal right to child benefit for all families and medical cards for the over-70s.
He also suggested targeting child benefit at poor families and limiting the issuing of medical cards.
Beaumont said: “Child benefits are universal. There is no means testing so all families qualify for child benefits. And the child benefit amount has risen very substantially in the last decade so it is quite an expensive part of the social welfare budget.
“We are just laying out the option that you consider paying it to the families who are relatively less well-off and save quite substantial expenditures in the process.”
The IMF also wants to see an end to the practise of giving everybody over 70 a free medical card.
Beaumont added: “Similarly with the medical card, all persons over a certain age, I think it's 70, qualify for a medical card."
The population over 70 is going to be rising so the cost of the medical cards will keep on rising.
“One way to contain that type of demographic pressure is to again look to some means testing on eligibility for those medical cards.”
In response, a spokesman for Minister for Finance Michael Noonan said: “The Cabinet will take the budget decisions at the time of the Budget and will endeavour to implement the measures in as fair a way as possible.
“The IMF review has acknowledged the progress that had been made in returning the economy to growth, restoring order to the public finances and dealing with the banking crisis.
“The IMF also pointed out that many challenges remain.”
The IMF did praise the Government for its implementation of the Croke Park Agreement, the €2.25bn stimulus plan announced this week, and the continued work towards meeting debt repayment targets.
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