Ministers say ‘substantial’ cost-of-living package will focus on families

A “substantial” spring cost-of-living package is set to be agreed by Government on Tuesday, with it expected to give support to families and lump sums to those receiving welfare.

Speaking on their way into Cabinet, ministers suggested that the measures were appropriate, but added that there was enough financial “firepower” left for later in the year when they expect further support will be needed.

Ministers are gathering to give their formal sign-off after senior members of Government set out a series of support on Monday night.

It is understood that 200-euro lump sums will be given to pensioners, carers, people with disabilities, widows and lone parents; a 100-euro sum for Child Benefit recipients; and a 100 euro extra added to the school clothing and footwear allowance.

The total cost of social protection measures is expected to be over 400 million euro.

It comes as a number of one-off measures introduced alongside Budget 2023 are due to expire at the end of the month.

These include the energy credit scheme for households, with the final 200-euro payment due in March, the reduced 9% VAT rate for hospitality, as well as electricity and gas bills, and the Temporary Business Energy Support Scheme (TBESS).

Finance Minister Michael McGrath said that deciding on the measures was a “fine balancing act”.

“It is a matter of judgment. These are not easy calls to make. We recognise that people are under pressure, we have sought to target resources in the best way that we possibly can.

“But we are significantly easing the ending of the various tax measures because we recognise the impact on people’s bills, on the costs at the pumps and forecourts would be really, really onerous if the Government did not step in and provide more money.

“I think it’s really important to underline that point, the Government has to provide more money to extend these measures,” he said.

Mr McGrath said “the key consideration” was to allow inflation to continue to fall.

“It is falling, thankfully, and we want to help that, not push it back up again.”

He added: “There will almost certainly be challenges down the line, particularly for later this year. And I am satisfied with the decisions I believe we will make today, that there will be capacity for a significant response later in the year.

“It’s important that we have that firepower. By acting prudently now, the Government will be in a position to help people more when we believe the need will be greater.”

Tanaiste and minister for foreign affairs Micheal Martin has said that the Government is in a position to ensure that there is no “cliff-edge ending” to the cost-of-living support that it has introduced so far.

“Today there will be a substantial package that will be targeted particularly at families, in respect of social protection and education. We’ve consistently now increased supports for children in education and for families for school transport and that will be reflected again today,” he said.

“The broader picture is that these are targeted measures, we have to look at things in their entirety… and also looking ahead to the next winter, which could still be challenging obviously given the situation in Ukraine, the war in Ukraine, and the unstable geopolitical situation in the world.”

When asked about whether an additional 200-euro energy credit had been abandoned by Government, Mr Martin said that people should regard speculation with a healthy amount of scepticism.

“The package all-round is right for this particular time and we have to be mindful of the fact that we’ll have a budget in October… and the focus will be on that in terms of more embedded reforms,” he said.

Taoiseach Leo Varadkar has said previously that pensioners and those receiving welfare payments would benefit from the package, while Minister for Transport Eamon Ryan said the coalition had seen research that indicates lone parents are particularly vulnerable to higher energy bills.

On Monday evening, the three coalition leaders met with Mr McGrath, Public Expenditure Paschal Donohoe and Social Protection Minister Heather Humphreys to discuss what measures will be taken, with an announcement expected afterwards.