Charities question budget's 'failure to address impact of inflation' on low-income households

Charities question budget's 'failure to address impact of inflation' on low-income households

"We work with older people who are turning off their fridges and pendant alarms," said Seán Moynihan, CEO of older persons’ charity Alone. Picture: Jason Clarke

Households will be given a €600 energy credit to help them pay the cost of their energy bills this winter and into 2023, the Government has said.

The announcement of the three instalments of €200 to be paid to every household in the country was one of the key pillars of the Budget 2023 cost-of-living package.

The credit will be automatically applied to accounts in November, January, and March, at an overall cost to the exchequer of €1.2bn.

Public Expenditure Minister Michael McGrath said that everyone is impacted by rising energy prices, and that the Government “believes it is important that we provide a level of support to all households”.

Public Expenditure Minister Michael McGrath arriving at Government Buildings, Dublin, to unveil the Government's Budget for 2023.
Public Expenditure Minister Michael McGrath arriving at Government Buildings, Dublin, to unveil the Government's Budget for 2023.

This will be the second universal support given to households to meet the cost of their energy bills this year, after an initial €200 was given earlier in the year in the wake of huge increases in the cost of electricity and gas last year and following the outbreak of war in Ukraine.

The average energy customer has seen their annual bill rise significantly since prices first began to increase significantly in late 2020.

Households are likely already paying €1,000 extra on their annual bills now compared to the beginning of last year, with bills soaring above €3,000 a year.

According to the CSO’s Consumer Price Index, the cost of energy products in Ireland had risen by almost 40% in the year to August 2022, with further increases from all the major suppliers due to take effect in the coming weeks.

The Economic and Social Research Institute, meanwhile, recently warned that up to 43% of households could soon be in energy poverty. This is defined as a family spending more than 10% of its income on energy.

The Society of St Vincent de Paul said that while this will help families in the run-up to Christmas, “without a weekly increase, it won’t provide people with certainty throughout winter”.

SVP head of social justice Dr Tricia Keilty said: “The failure to address the impact of inflation on low-income households beyond short-term measures puts many people at risk of being pulled further into the kind of grinding daily hardship that is very difficult to escape.” 

Alongside this €600 credit measure, a lump sum payment of €400 will be made before Christmas to recipients of the weekly fuel allowance payment.

Older people 'turning off their fridges'

Peter McVerry Trust CEO Pat Doyle said these measures “will ensure that vulnerable people living alone, which includes thousands of people who have previously been and those now at risk of homelessness, will be better able to afford the cost of heating their home this winter”.

However, older persons’ charity Alone warned that the measures in the budget will not be enough for many.

We work with older people who are turning off their fridges and pendant alarms, who are selling off items to support themselves, who are spending their days in shopping centres and on trains to avoid the cost of having to heat their homes,” said CEO Seán Moynihan. 

Alone said that the €400 one-off payment translated to a €14-per-week increase, which was significantly less than the €20-per-week and increase from the 28-week to 35-week fuel allowance season the organisation had called for.

The Government had also faced calls to introduce a windfall tax on energy companies that are making huge profits at a time when families are facing surging bills.

In his speech, Finance Minister Paschal Donohoe said that “it’s not fair for companies to earn excess profits from the current volatility in the market”.

However, he failed to commit to a windfall tax as Ireland “aims to be part” of the EU-wide response to high energy prices.

If this is not possible, this Government will bring forward our own measures,” he added.

'Huge gamble'

Trade union Siptu warned that the Government is taking a “huge gamble” on energy prices in the budget through large payments to energy firms to offer relief to households and businesses.

Siptu researcher Michael Taft said: “The Government’s failure to regulate energy prices means that households and businesses are taking on the risks of rising prices. 

"The electricity credits, once-off social transfers, and business supports are effectively subsidising high energy prices and may not be enough to shield the economy from long-term inflation.”

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From florist to fraudster, leaving a trail of destruction from North Cork, to Waterford, to Clare, to Wexford and through the midlands ... learn how mistress of re-invention, Catherine O'Brien, scammed her way around rural Ireland.

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