Social welfare supports will increase annually, says Varadkar

Taoiseach Leo Varadkar said his Government will continue to improve pensions and welfare rates in the coming years provided the country can afford it. Picture: Niall Carson/PA

Pensioners and those on social welfare supports can expect annual increases in payments in the years ahead, Taoiseach Leo Varadkar has said.

All social welfare payments will jump by €12 per week from January under measures announced in the budget. 

The hike follows the same level of increase this year.

Mr Varadkar has said his Government will continue to improve pensions and welfare rates in the coming years provided the country can afford it and "we stick with economic policies that have worked".

He said: "When it comes to pensions, we've broadly set the benchmark that the pension should be pitched at around a third, around 33% or 34%, of median earnings. That's a good benchmark. We will keep pensions at that rate."

He said other welfare payments should rise in line with the cost of living "or a little be better" if the State can afford to do so.

But he stressed that in order to encourage people to seek employment, his party is adamant that there should be a "decent gap" between jobseekers' payments and the level workers receive on the minimum wage.

"The gap actually has widened in in recent years. So even though we've increased the amount that a jobseeker gets paid every week, we've increased the national wage by more and that means the incentive to work is greater under what they call the replacement rate.

"That’s done to make sure that if people ever are in a position where they're choosing between work and welfare, the choice of work is more attractive."

As part of Budget 2024, the Government announced that it was upping the minimum wage to €12.70.

In November last year, the Government signed off on a plan to replace the minimum wage with a national living wage by January 2026 and asked the Low Pay Commission to make recommendations to achieve this.

The living wage is to be set at 60% of the hourly median wage. The current minimum wage of €11.30 an hour only represents 51.8% of the median hourly wage of €21.28.

As part of Budget 2024, the Government announced that it was upping the minimum wage to €12.70 following recommendations from the commission — an increase of 12.4%.

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However, the chair of the Low Pay Commission, Ultan Courtney, has warned that “significant changes” will need to be made to the minimum wage before 2026 if the Government is to reach its target of benchmarking it to 60% of the hourly median wage.

But Mr Varadkar stressed that "it's not just about the living wage" and pointed to a number of other measures which the Government has introduced to protect families and workers.

"The fact that half the country now qualifies for free GP care was in recognition of that because it was one of the fears that people would have is that if they took up work they might lose their free GP care or they might lose their entitlement to housing or they might lose their Susi grant or they might lose their access to subsidised child care," he said.

"So what we've done in order to make work pay, to encourage work, is to increase wages, but also eliminate some of those traps if you like where people who work longer hours, or take up work, or get a pay increase actually end up losing benefits that they have, and we made a lot of progress I think in that regard."