Water charges will be further reduced for vulnerable groups and low earners in steps to be announced in the budget.
The Coalition move comes after disappointing by-election results for the main parties over the weekend, and a warning that growing opposition to water charges would mobilise into a national movement.
The Irish Examiner has learnt that a water charge alleviation package will be announced tomorrow which is expected to include a tax credit for people on low incomes.
This is in addition to the €100 allowance for water charges for those on household benefits, as already announced by Tánaiste Joan Burton.
One minister said: “It’s low-paid workers — you’re talking about a tax credit.”
Junior Minister Aodhán Ó Ríordáin said yesterday that the budget would include measures to alleviate pressures on those on social welfare, as well as those on low pay.
A separate Government source insisted that the extra relief for households had been agreed before Saturday’s massive anti-water charge demonstration in Dublin — which some estimated had been attended by more than 100,000 people — and the surprise by-election defeats.
Opposition to the charge helped Socialist Paul Murphy win enough transfers to beat the favourite, Sinn Féin’s Cathal King, in Dublin South-West.
The former MEP wants households not to pay, and says he will help restore supplies if homes are cut off.
Socialist Party leader Joe Higgins called the result an “earthquake” and a blow against austerity.
Labour ministers will meet as a group today to discuss the budget.
Other measures to be announced will include funds for 1,000 new teachers, €300m to supplement health spending, a housing construction initiative, and changes to pension levies.
It is widely agreed that changes to the Universal Social Charge for workers and a reduction in the 41% top rate of income tax will be signalled under a three-year tax plan.
Taoiseach Enda Kenny has said the new tax measures will help create an additional 15,000 jobs by 2018.
The Government is also expected to address international pressure to phase out the ‘double Irish’ tax regime which allows foreign companies here reduce their tax liabilities.
Following efforts from the hospitality sector, the special 9% Vat rate for restaurants and hotels is also expected to remain untouched.
Fianna Fáil has claimed that the Coalition is engaging in ‘auction’ politics and warned that more should be done to bed down the recovery by restoring services that were savaged in the recession.
Sinn Féin have said it would abolish water and property charges if in power.
Tomorrow’s budget will be the first for the Fine Gael-Labour Coalition since Ireland exited the bailout.
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