The Government is considering cutting unemployment assistance by 20% for those under 23 years of age.

It comes as the Minister for Finance argues the case that €4bn in cuts in the budget are essential to bring stability to the country and reassure those funding our debt.

The job seekers' allowance paid to those under 23 could be cut to €160 to reduce the social welfare bill and encourage more young people into training.

It's also reported a cut of 2-3% in the basic unemployment benefit would save between €100m and €150m.

Meanwhile writing in today's Sunday Business Post the Minister for Finance said the €20bn gap between incoming tax revenue and day-to-day spending on health, education and social welfare cannot be sustained.

Brian Lenihan said €4bn in cuts will stabilise the deficit and send a clear message that we have the capacity to tackle our difficulties.

Meanwhile it has been reported that Fine Gael's pre-budget proposals include pay cuts for public servants on salaries starting at €35,000 a year. The party had said it would impose cuts on those over €80k.

Officials in the Department of Finance are also reported to be preparing proposals for a car scrappage scheme.

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04/02/2010: Finance Bill to be published
19/01/2010: GRA rows back on strike ballot plans
13/01/2010: Public sector protests to start next week
11/01/2010: Fifth of Budget cuts 'come from the poor'