Fuel allowance bonus to be part of cost-of-living package

Social Protection Minister Heather Humphreys is also expected to bring a proposal to Cabinet on Wednesday, which would provide a three-week lump sum for those in receipt of fuel allowance.

The Government is set to reduce VAT on gas and electricity and provide a lump sum payment to those on fuel allowance as part of a cost-of-living package.

Taoiseach Micheál Martin, Tánaiste Leo Varadkar, Green Party leader Eamon Ryan and a number of ministers met on Monday evening to discuss a range of options to tackle soaring inflation and fuel bills.

Finance Minister Paschal Donohoe, who gave a presentation at the meeting, brought forward measures which would see the VAT on gas and electricity go from the current 13.5% to 9%.

It is understood Mr Donohoe has secured agreement from the EU Commission on this temporary measure, which could see about €49 shaved off gas bills and a €61 reduction on electricity bills each year.

Social Protection Minister Heather Humphreys is also expected to bring a proposal to Cabinet on Wednesday, which would provide a three-week lump sum for those in receipt of fuel allowance.

This would come to €99 and it is hoped it would be given out in the coming weeks.

Other measures previously flagged, include a slashing of the PSO (Public Service Obligation) levy from October, which is charged to all electricity customers in Ireland and supports the generation of electricity from sustainable, renewable and indigenous sources.

This will be contained in a separate “energy framework” memo that is due to be brought to Cabinet by Mr Ryan on Wednesday.