Pearse Doherty (Donegal, Sinn Fein)
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311. To ask the Minister for Social Protection if he will consider reinstating the telephone allowance in the household benefits package; and if he will make a statement on the matter. [30246/16]

Leo Varadkar (Dublin West, Fine Gael)
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The overall concern in recent years has been to protect the weekly social welfare rates. Expenditure on pensions at approx. €6.976 billion is the largest block of expenditure in the Department in the Estimate for 2016, representing approximately 35% of overall expenditure. Due to demographic changes, my Department’s spending on older people is increasing year on year. Maintaining the rate of the State pension and other core payments is critical in protecting people from poverty.

The decision to discontinue the telephone allowance was estimated to provide annual savings of €48 million. These savings meant that my Department was able to retain the other valuable elements of the household benefits package such as the electricity and gas allowance and the television licence. My Department will spend approximately €228 million this year on these elements of the household benefits package for over 420,000 customers.

The cost of the telephone allowance scheme had risen significantly each year, as the number of eligible customers grew, arising from the increased number of pension recipients. In 2007 there were some 316,000 people receiving the telephone allowance compared to almost 396,000 at the end of September 2013, an increase of 25%, or an average increase of nearly 4% per annum.

The Government is keenly aware of the impact of Budget decisions on the Department’s clients, and strives to ensure that the money available is targeted in the most effective way. In Budget 2016, the first increase in the basic rate of the State pension in seven years was given. This has increased the personal rate of the non-contributory pension to €222, and that of the contributory pension to €233.30. There was also a €2.50 increase in the rate of the Fuel Allowance, from €20 to €22.50 per week.

In Budget 2017, it was announced that there will be a further increase in the rate of State pensions, by €5, which will increase the maximum personal rate of the State pension (contributory) to €238.30 in March of next year.

Therefore, over the past two Budgets, the maximum weekly rate for State Pensions has increased by €8 per week, which is the equivalent of over €34 per month. The value of these increases is in excess of the value of the telephone allowance previously provided.

I am informed that, according to the most recent Consumer Price Index figures, there was slightly negative inflation in the 12 months to August 2016.

Any decision to restore the telephone allowance would have to be considered in the context of next year’s overall budgetary negotiations. On this occasion, the Government has concentrated resources on increasing the rate of the pension, rather than on the Household Benefits package.

I hope this clarifies the matter for the Deputy.