Welfare cuts? What cuts?

Daithinski

donegalfella wrote: »

This post has been deleted.

€3.80 saved per week. Now, due to recent flooding events,house insurance costs have gone up by 100% for a huge chunk of the country.

If your insurance was €300 its now €600. This is about an extra €5-6 a week.

Petrol has gone up. 2 gallons is up about 40 cent.

Carbon tax on ESB/Gas will be up about 6%.

(Interest rates will soon be going up.)

To sum up, the cost of living has not gone down. (The cost of buying a basket of goods has gone down).

donegalfella wrote: »

The point of my post is that €196 will go further in 2010 than €204.30 did in 2009. In real (deflation adjusted) terms, social welfare has gone up, not down.

Wrong. You seem like a reasonably intelligent person. I don't know why you would be using selective information to try and prove a point that you know is wrong. Maybe this is why? (I robbed this off an earlier post)


Don't p!ss down peoples backs and tell them its raining.

murphaph

namenotavailabl wrote: »

I'm attaching an image file showing the issue of welfare cuts v deflation to illustrate the point I was making re welfare cuts. The image uses donegalfella's given values of food deflation of 7.6% for 2009 (I assumed this to be an even decline throughout the period). Columns 4 and 5 show the purchasing power of a fixed welfare rate of €204 in 2009 v €196 in 2010 (measured in terms of '# of baskets which can be purchased' in each year).

It can be seen that the effect of deflation (which I might note I was asking rhetorically about in post #203 of the thread) is that the welfare recipient's purchasing power improved in 2009. This point is not in dispute- essentially, where s/he could purchase 4.08 baskets on income of €204 in January 2009, s/he could purchase 4.42 baskets by December 2009 with the same income.

My point, however, is that the recipient will experience an immediate decline in his/her living standards in January 2010, as the revised welfare rates will result in a lower purchasing power compared to December 2009. Per the illustration, s/he can only purchase 4.24 baskets in January 2010 compared to 4.42 in December 2009 (assuming that the December 2009 prices apply in January 2010- that's obviously open to valid debate).

Accordingly, there is an immediate adverse impact- the purchasing power is brought back to June 2009 levels. Even if the January prices were slightly lower than December 2010 (e.g deflation continuing/ benefit of January sales/ multiples in a price war), the purchasing power is unlikely to match December 2009 levels.

Obviously, for the rest of 2010, the net annual outcome will depend on the impact of inflation/deflation. If prices remain static, the welfare recipient is marginally worse off (less than 0.5% in a year). If prices continue to fall, s/he is ahead, depending on the extent of the fall. If prices rise, s/he is worse off.

I hope that the foregoing can be agreed as an honest attempt at an appraisal of the situation.

Your whole point seems to be that it's a shame that governments only publish budgets once a year and not more often. The government is reacting to things with the budget, so of course there is a delay.

namenotavailablE

Your whole point seems to be that it's a shame that governments only publish budgets once a year and not more often.

That is not my point- I certainly don't think that governments need to introduce multiple budgets as it leads to both greater uncertainty and dislocation. My sole point is that the recipients of welfare are likely to be worse off as a result of the reductions in rates of payment.

At an absolute minimum, it seems reasonably likely that they will see a reduction in their real purchasing power in early 2010, based on the analysis contained in the image in my previous point. I can't offer any prediction for the entire year (beyond the 'each-way-hedging' in my previous point) as it will depend utterly on the rate of inflation and how accurate a measure it is of the cost of living for welfare recipients.

murphaph

namenotavailabl wrote: »

That is not my point- I certainly don't think that governments need to introduce multiple budgets as it leads to both greater uncertainty and dislocation. My sole point is that the recipients of welfare are likely to be worse off as a result of the reductions in rates of payment.

At an absolute minimum, it seems reasonably likely that they will see a reduction in their real purchasing power in early 2010, based on the analysis contained in the image in my previous point. I can't offer any prediction for the entire year (beyond the 'each-way-hedging' in my previous point) as it will depend utterly on the rate of inflation and how accurate a measure it is of the cost of living for welfare recipients.

But will they be worse off on January the 1st 2010 than they were on January 1st 2009? That is all that matters as budgets are annual affairs. In any case, even if they were worse off, which they won't be, so what? The country is in the sh!t. Everyone has to take the pain.

Permabear

This post has been deleted.

Stark

namenotavailabl wrote: »

Accordingly, there is an immediate adverse impact- the purchasing power is brought back to June 2009 levels. Even if the January prices were slightly lower than December 2010 (e.g deflation continuing/ benefit of January sales/ multiples in a price war), the purchasing power is unlikely to match December 2009 levels.

Their purchasing power was higher in June 2009 than it was throughout the whole of 2008. Therefore they've benefited from the effects of the recession. Therefore they can STFU about being hard hit (misfortune of losing job aside).

irish_bob

KC JONES wrote: »

not true. you can be locked up, as you put it, if you are a danger to yourself/others. you don't have to carry out a killing but be thought likely to..

open to interperation and rarely does it happen

deadhead13

donegalfella wrote: »

This post has been deleted.

Social welfare payments were cut by the Government in a framework of reducing public spending next year by 4 billion. In that respect the above is irrelavant, unless you wanted them to significantly further increase public spending cuts in this budget. Doing this would run the risk of further recessionary pressures.

thebman

Stark wrote: »

Their purchasing power was higher in June 2009 than it was throughout the whole of 2008. Therefore they've benefited from the effects of the recession. Therefore they can STFU about being hard hit (misfortune of losing job aside).

That's a bit rough in fairness given iPink's position as she outlined it earlier. I can understand how someone might actually be in a situation where they have access to one local shop that isn't lowering prices since they are the only shop for miles. In a reasonably rural area or small village, that could be the situation and the only way you'd get to cheaper prices is to get a car.

You could argue they should move but that costs money too. I think we need something to help people like that out even if its a once off payment to help them move to a town. Of course that would have to come from somewhere else but there are single people over 23 still getting massive payments so I imagine if you reworked it to cut all single people living in towns and gave people living in rural areas a once off allowance to move to towns so everyone is at least on the same playing field and we can try to ensure people aren't being left out in the cold with too little.

I don't have a problem with people feeling hard done by and venting but they have to realise that the money isn't there and you can't tax everyone more to pay other peoples mortgages or we'll end up in a situation where people with jobs can't afford their own mortgage payments because they are paying so much tax to cover other peoples.

billy the squid

donegalfella wrote: »

This post has been deleted.

It is obvious that you are not reading the posts on here properly. The interest relief payments only cover someone for a set period of time. This was mentioned already in this thread today.

namenotavailablE

But will they be worse off on January the 1st 2010 than they were on January 1st 2009?

Now the dole is falling more slowly than the rate of deflation.
So social welfare recipients are still better off year-to-year, in real terms.

I would accept that it's more likely than not that the current welfare levels would likely be of greater real value than those applying in 2000 in a purchasing power sense (I have no hard analysis to back this up/ disagree with it but it seems 'plausible').
However, what really matters is the future- if I were a welfare recipient, I'd rightly feel that I'm going to be worse off if my revenues meant that I could only buy 4.24 'baskets' in January 2010 compared to 4.42 in December 2009. My point remains that -going forward- they will not be able to purchase the same basket of goods with their reduced rates of welfare, at least in the immediately foreseeable future (unless, of course, the cost of that basket reduces). To my mind, this represents an unequivocal decline in their living standards. Granted, if deflation continues apace, that would offer real compensation (and could even put them ahead) but who knows what the future holds- factors such as changes in interest rates/ energy prices/ a US recovery or a depression/ Chinese inflation or deflation might all impact on the Irish economy and purchasing power in multiple ways.

Their purchasing power was higher in June 2009 than it was throughout the whole of 2008. Therefore they've benefited from the effects of the recession.

In all fairness, I think the very fact that the price of goods has come down by 7.6% will be of cold comfort to those relying on the soon-to-be-reduced reduced rate of JSB/JSA (particularly those who became welfare recipients in the past 12-24 months due to job losses). I very much doubt that they would consider themselves to have benefitted from the recession. Additionally, per my point above- what matters is the future: people in a financially stressful situation want to survive tomorrow/ next month/ the next bill. Faced with a reduction in purchasing power, they are unlikely to derive much comfort from adopting a 'things were worse a few years ago' philosophy when the price of milk becomes a more pressing immediate concern.

In summary, while I enjoyed the to-and-fro of this discusion, I can see that none of us are for turning. I propose that we agree to disagree- "You can convince some of the people some of the time etc...".

murphaph

namenotavailabl wrote: »

Faced with a reduction in purchasing power, they are unlikely to derive much comfort from adopting a 'things were worse a few years ago' philosophy when the price of milk becomes a more pressing immediate concern.

Luckily the price of milk is also decreasing rapidly. Your whole point seems to ignore all economic reality.

1) Dole recipients are better off in real terms now than at the beginning of the year and will still be better off in January next year than they were in January this year!

2) Ireland is fcuked.

Eliot Rosewater

donegalfella wrote: »

This post has been deleted.

I suppose it was better for society that the dole was raised so much before an election?

These numbers just confirm the fact that the Social Welfare increases, although purportedly increased on societal grounds, were actually used to get votes. It makes it quite funny when one hears of the terrible things reducing the dole will supposedly do to peoples lives: as if it being increased was actually necessary.

I would be very interested in hearing why less than half of the current dole rate was good enough in 2000, and why reducing the dole by only 5% last week makes such a big difference, when people have clearly survived on much less before.

Is the cost of living in 2009 213% of that of 9 years ago?

Daithinski

Eliot Rosewater wrote: »

Is the cost of living in 2009 213% of that of 9 years ago?

What does this matter? Comparing the cost of living to 9 years ago is a pointless exercise.

Work out the cost of living today and then see if the dole covers it.

lmimmfn

Daithinski wrote: »

€3.80 saved per week. Now, due to recent flooding events,house insurance costs have gone up by 100% for a huge chunk of the country.

If your insurance was €300 its now €600. This is about an extra €5-6 a week.

Petrol has gone up. 2 gallons is up about 40 cent.

Carbon tax on ESB/Gas will be up about 6%.

(Interest rates will soon be going up.)

To sum up, the cost of living has not gone down. (The cost of buying a basket of goods has gone down).



Wrong. You seem like a reasonably intelligent person. I don't know why you would be using selective information to try and prove a point that you know is wrong. Maybe this is why? (I robbed this off an earlier post)


Don't p!ss down peoples backs and tell them its raining.

wow so the absolute minimum standard of living in this place affords:
1. A house with mortgage and house insurance for the luxury items.
2. A car
nice, remind me why people work again?

Permabear

This post has been deleted.

whatisayis

lmimmfn wrote: »

wow so the absolute minimum standard of living in this place affords:
1. A house with mortgage and house insurance for the luxury items.
2. A car
nice, remind me why people work again?

People work so they can enjoy a reasonably comfortable standard of living. To some that might mean buying a car, going on an annual holiday or buying a house so that they can start a family.

Unfortunately, they might go into work one Monday and find out that their job is gone. 180,000 people have lost their job in Ireland this year and many of those have debts which need to be paid back. If they have a mortgage, they have to have house insurance - it is a requirement by the lender.

The minimum standard of living does NOT allow them to pay back their loans which means by the end of 2010 there is going to be a huge increase in loan defaults and the banks will require even more tax payers money to keep them afloat, as another poster pointed out.

The cost of living has gone down as regards the "basket of food" but the carbon tax on petrol/gas/oil will result in increased business costs and that will be passed on to the consumer in higher prices. This will result in:

less spending
which will lead to more job losses
which will lead to more people on social welfare
which will lead to more loan defaults
which will lead to higher taxes

and the circle goes on and on.

The government have done a superb job of dividing the people. While everyone is venting their anger at those on social welfare or the public sector workers some of whom are on low wages, the quangos continue to cost millions, the ministers retain their high salaries and expenses etc. etc., and we are all busy arguing whether 196 euros a week is too little or too much to survive on.

P. Breathnach

KerranJast wrote: »

Transfer of wealth from young to old more like. If people younger than 45 want to find where the wealth of the country from all the property deals has gone, ask ye're parents. It's that generation who bought cheap in the 60s/70s/80s and sold big in the 90s/00s that reaped the real rewards of the Celtic Tiger.

Most of the older people I know (my peers, of course) still live in the houses that they bought in the 60s/70s/80s. Any capital gain they made is normally unrealised.

Some people, but not any of my acquaintance, did "release equity". All that means is that they borrowed money on the security of their homes, a measure that did not make them one cent richer. Often the equity released was used to help their offspring compete in an overheated property market.

So who did gain? One group I think of is the inheriting generation, mostly middle-aged people who had a family home to sell after their parents died. I can think of others, but I point to this particular group as the most usual beneficiaries of the sale of homes bought cheaply in the 60s/70s/80s.

Klingon Hamlet

IMHO social welfare and all allowances are there as a support structure for those that need and deserve it, of which there are many.

However there is a culture of people actually choosing dole over work and this has to end.

Instead of cutting the benefits they should have simply targeted dole-careerists and welfare-fraudsters and cut them off then and there.

That way the spare cash (of which there would be massive amounts) could be funneled towards benefits, education and job creation.

The cuts were the easy way out though, because our government is the laziest and most corrupt pack of sods in Europe.

Full stop. Cue riotous applause.

thebman

donegalfella wrote: »

This post has been deleted.

Well I am in favor of giving different amounts depending on the cost of living in their area if it would be cheap enough to administrate and the existing staff should be able to do it for most areas I would imagine given a basket and a list and find the cheap places to rent etc... total it up and you have what a person in that area should get.

It is cheaper to live in Donegal but not if your without a car and don't live in a town. Then many people will need a car just to buy the groceries or to get to a job interview.

At the moments its easier to live on the dole depending on your location and realistically that isn't right either.

Dr Kamikazi

Klingon Hamlet wrote: »

The cuts were the easy way out though, because our government is the laziest and most corrupt pack of sods in Europe.

Full stop. Cue riotous applause.

NO, I won't have that!
I will not stand idly by as you accuse the Irish government as being the most corrupt in Europe, that honour has undoubtedly to go to Italy, they haven't even had a single government that ran it's full term since the 1940's. Irish politicians are merely crooked horse dealers compared to these maestros of sleaze and corruption, they are basically nothing more than the political arm of the Mafia.
No, Irish politicians are merely the laziest, most incompetent, brazen and that shows even in their corruption, the one thing they managed to do that stands out in all of Europe was selling democracy openly out of a tent at the Galway Races.
I have to admit that even the Italians didn't have the audacity to pull that one off in front of the entire country. However what they pull off behind the scenes will certainly one day be the stuff of history classes...
FF has just been pulling the wool over our eyes with the excuse of selling us a new jumper/house.
And we let them.

whatisayis

donegalfella wrote: »

This post has been deleted.

I have always been interested in the cost of living comparison between Dublin and Donegal or rural Ireland.

Single person Dublin gets €122.00 rent allowance weekly, Donegal €85.00.
Couple/one child Dublin €214.00 " " Donegal €131.00

A person in Dublin can use gas for heating which is cheaper than oil/coal which is the only option for many in Ireland.

ESB standing charges are cheaper in urban areas €17.44 per two month bill as opposed to €23.26 on the rural tariff.

There is a greater variety of shops in Dublin which means more competitive pricing as opposed to rural areas.

Public transportation is practically non existent in rural Ireland therefore having a car is a necessity not a luxury which means paying insurance, tax, petrol etc.

So I am genuinely perplexed as to how it can be cheaper to live in Donegal or rural Ireland as opposed to Dublin once you take the price of rent (which has been factored in for social welfare purposes) out of the equation.

Daithinski

lmimmfn wrote: »

wow so the absolute minimum standard of living in this place affords:
1. A house with mortgage and house insurance for the luxury items.
2. A car
nice, remind me why people work again?

I'm not sure what the point is in the above string of gibberish.

Its not quite sarcasm, not quite a question, and not quite a statement, it has no substance but somehow implies that on the dole you can afford to run a car, have a mortgage and "luxury items".

lmimmfn

Daithinski wrote: »

I'm not sure what the point is in the above string of gibberish.

Its not quite sarcasm, not quite a question, and not quite a statement, it has no substance but somehow implies that on the dole you can afford to run a car, have a mortgage and "luxury items".

lmao, brilliant, you cant read it but you can, yet at the same time its gibberish, eh?, perhaps take reading lessons or apply some interpretation, could help in your daily activities too.

starbelgrade

whatisayis wrote: »

Unfortunately, they might go into work one Monday and find out that their job is gone. 180,000 people have lost their job in Ireland this year and many of those have debts which need to be paid back. If they have a mortgage, they have to have house insurance - it is a requirement by the lender.

Forgive me if I am wrong, but I think that you are confusing house insurance policies (which together with life assurance policies) are a requirement for mortgage approval, with mortgage protection insurance, which is not a prerequisite & is completley at the discretion of the person(s) availing of the mortgage.

House insurance covers structural damage to the house, with an option to cover theft or damage of it's contents, whilst mortgage protection insurance covers the payment or part payment of the mortgage, should the holder/ holders be unable to work due to illness or unemployment. The second also only covers payments up to a specified time, usually 12 months.

starbelgrade

donegalfella wrote: »

This post has been deleted.

You could also ask how long the government should pay a private landlord's mortgage by supplementing rental costs through their rent allowance scheme, the balance of which is mostly paid for by their payments through the social welfare payments.

P. Breathnach

starbelgrade wrote: »

You could also ask how long the government should pay a private landlord's mortgage by supplementing rental costs through their rent allowance scheme, the balance of which is mostly paid for by their payments through the social welfare payments.

There is an interesting debate to be had about housing people who cannot afford to house themselves. The state accepted that as a target in the 1930s, and provided a great deal of social housing from then up to fairly recent times. The state also contributed to the idea that home ownership is normal by selling social housing to its tenants at discounted prices -- something I think should not have been done.

More recently, social housing has been supplied by other means, including by subsidising rents.

If it costs no more to contribute to paying a mortgage than it would cost to subsidise rent, then I think that is the thing to do. More often, though, I think mortgage subsidies would need to be higher.

It's not an easy call, though. If a family loses its home and ends up carrying a large debt for a shortfall in redeeming a mortgage, what is to be done? They will need to be housed and somehow, sometime, the debt will get them.

If the exchequer had the means, perhaps the best measure would be to redeem the mortgage, take the property into state ownership, and rent it to the family (subsidising the rent for the period of unemployment). But the exchequer is worse than empty.

starbelgrade

Everyone's gotta live somewhere.

billy the squid

donegalfella wrote: »

This post has been deleted.

In my opinion, there should be a facility which allows the recipient to pay it back once they find work should they go over the 1 year.

whatisayis

starbelgrade wrote: »

Forgive me if I am wrong, but I think that you are confusing house insurance policies (which together with life assurance policies) are a requirement for mortgage approval, with mortgage protection insurance, which is not a prerequisite & is completley at the discretion of the person(s) availing of the mortgage.

House insurance covers structural damage to the house, with an option to cover theft or damage of it's contents, whilst mortgage protection insurance covers the payment or part payment of the mortgage, should the holder/ holders be unable to work due to illness or unemployment. The second also only covers payments up to a specified time, usually 12 months.

Actually I did mean house insurance policies - not mortgage protection policies. Quite a few years back, my OH was made redundant and, as we had mortgage protection insurance, we decided to use it to help pay the mortgage.

It came as quite a surprise to find that, although the house was in both our names, the bank had taken out the protection insurance in only one name without telling us. It was in my name only so therefore we could not claim it.

I would suggest everyone who has this type of insurance to check their policy as the bank told us at the time that it can only be taken out in one persons name. Maybe they had just made a mistake and put it in one name only but for whatever reason, it was worthless to us at that time.