Welfare recipients are set to receive a “triple whammy” of financial assistance in the budget including a double once-off payment in the Autumn, thanks to the buoyancy in the public finances.
It is also expected the cost-of-living package in the budget to help struggling families could reach €2bn though that will depend on how expensive the public sector pay deal will be, senior Government ministers have said.
With public finances now likely to run a surplus of €5bn at year-end, there is a growing sense that a majority of the windfall revenues will be put into savings or used to pay down the national debt.
The likely triple whammy for welfare recipients will include a double once-off payment in the autumn; a permanent increase of at least €10 to all welfare rates; and the Christmas bonus.
It has been stated that a once-off double child benefit payment to all parents at a cost of €170m is a “near certainty”.
The child benefit increase would see parents get €280 one-off payment if they have one child or €560 if they have two. Parents with three children could get €840 if the policy is agreed by Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath.
Senior Government sources from across the coalition have also made clear that the introduction of a 30% tax rate is now “all but abandoned”.
“While nothing is formally off the table, the 30% rate is not going to happen. It would cost €500m. What will happen is an increase in the entry point to the top rate of tax,” a senior source told the
Senior officials will return to their desks next week with departments due to present their list of pre-budget demands to Mr McGrath in the coming days.
While he has signalled a willingness to go beyond the 5% pay increase for public sector workers, it has been made clear that a 9% increase is “not achievable”.
To meet current public sector wage demands could cost the State at least €1.6bn if agreed to by the Government.
Major frustration has been expressed within Government yet again over a “lack of clarity” over the current financial position in the health service.
“The major difficulty which we are dealing with is finding out what the starting position in health is. We have no idea yet and that is a problem,” a source said.
The Departments of Health and Children will both need extra funding before the end of the year to cover higher than expected spending this year.
A senior Cabinet source said Covid spending is significantly more than what had been anticipated for this year and the Department of Children has gone “well beyond” its allocation as the cost of housing Ukrainian refugees spirals.
“The health Covid spend will be higher than what was originally allocated, there was around €800m originally allocated.
“Of course, you had the Omicron wave at the start of the year, which was pretty intense, and then additional vaccinations with additional costs.
“So, they will certainly be over on Covid, but we held the Covid contingency in reserve, so we'll have to allocate some of that to health.”
On the cost of accommodating Ukraine refugees, the source said the Department of Children will “definitely be way over on accommodation”.
“Some departments underspend other departments overspend. Overall, I think we'll be within the overall expenditure ceiling for the year, but there will be moving parts, there will be some that will need a supplementary, others that will be under.
“That's kind of a tidying-up exercise in the last quarter of the year.”
Among the other one-off measures being considered are:
- An expansion of the eligibility and length of the fuel allowance;
- A repeat of the €200 energy credit to be paid before Christmas;
- An extension of the cut to excise duty until spring;
- About €2.7bn is available for unallocated measures in 2023.