Budget 2026: €10 increase to core social welfare rates; minimum wage hike; Vat changes
At The Groves Bar in Blackpool, punters swallow the latest Budget news along with their afternoon pints.
A social welfare boost, Vat changes, a minimum wage price hike, and a new derelict property tax have all been announced by the Government as part of Budget 2026.
Here's how the day played out as Paschal Donohoe and Jack Chambers announced Budget 2026.
- €10 increase to rates and double Christmas bonus payment confirmed;
- Minimum wage to ; 2% rate band for USC to rise by €1,318 to €28,700;
- The will be hiked by 50c from midnight;
- Vat for food and catering businesses, hairdressing services from July 1, 2026;
- New to replace derelict site levy and will be charged at a rate of 7% on the market value of the property; Vat rate for completed apartments cut from 13.5% to 9%;
- €5,000 VRT relief for electric vehicles extended until the end of 2026; will be applied to auto fuels from midnight.
- €500 reduction in the for third-level students
- €4.7bn transport budget will fund among other projects.
- A major redevelopment project at the will also be funded
Budget 2026 has been unveiled, and Political Correspondent Louise Burne joins Deirdre O'Shaugnessy on her podcast to break down the key measures and what they mean for households across Ireland.
In Budget 2026, the Government announced a €28.9bn allocation for the Department of Social Protection, including an increase of more than €2bn on the previous year.
It provides a €10 weekly increase for people receiving social welfare payments, along with several other key measures.
Here are some of the major changes and when they will take effect:
"Some weeks I was working 60 hours, to try and earn enough money to pay off my fees this year, and to pay for some sort of accommodation."
As division emerged in the Coalition last summer over cuts to third-level fees, Lilian Tiina Gleave was, some weeks, working up to 60 hours to cover the cost of her studies.
: Around 7% of people claiming the renters’ tax credit earn over €100,000 a year, and increasing the credit further would mainly benefit higher earners, according to a Government report.
A review of the renters’ tax credit, published by the Department of Finance to coincide with its extension in Budget 2026, found that the policy addresses “symptoms but not the root causes” of the housing crisis — namely, the lack of supply.
The 'old reliables' were hiked once again as part of Budget 2026.
The Irish Heart Foundation described the 50c increase on cigarettes as insufficient, saying Irish cigarette prices remain lower than in the UK.
“If we are serious about eliminating the toll of 12 deaths every day caused by smoking, a much tougher approach to tobacco taxes is unavoidable.”
You can read more from Ann Murphy below.
: Organisations are reacting to the decisions made by the Government in Budget 2026.
The Restaurants Association of Ireland has welcomed what it has called a "long-fought victory" for the industry following the Government's decision to reinstate a lower rate of Vat for the sector.
However, Vinters' Federation of Ireland (VFI) have said the budget "failed to deliver" for the thousands of traditional pubs it said are now "fighting for survival."
Those are the words of the Real family from Killarney.
They tell the Irish Examiner of their shock after being hit with electricity bills peaking at €500, despite owning an environmentally low-impact home.
Sinn Féin’s finance spokesman Pearse Doherty said that Budget 2026 should have been a “cost of living budget”.
“When all the clapping is done, when all the back slapping is over and the government benches die down when the dust settles in, all of the spin that we've heard, the bluster, the deluded arrogance that's come dripping from both ministers' speeches, ordinary people, where are they?” he said.
“They're left in the cold, hard reality written here in the black and white of this budget and your big message here in this budget, and people have heard it loud and clear here, is that you're on your own.
“This is a budget written by Fine Gael, a budget that abandons workers and families to look after those at the top.
“No help with the cost of living crisis, no action to end the rip off, no break from taxes, a blueprint for the continuation of the never-ending crises in our housing and health and election promises, one after the other, torn up and thrown in the bin.”
He added: “You screwed workers over royally in this budget.”
: And that is that! Mr Chambers has resumed his seat and Budget 2026 has been delivered.
Concluding his speech, Mr Chambers said the country has faced challenges but has always “found a way”.
“Time and time again, we have turned uncertainty into opportunity, challenge into success,” Mr Chambers said.
“We know what our challenges are and we must now grasp the opportunity to overcome them.
“We must build the foundation for our future: homes, communities and a country connected by a clear vision of a bigger and brighter future, for ourselves and our future.” Mr Chambers concluded by commending the budget to the House.
Mr Chambers announced there would be funding provided for the recruitment of an additional 1,000 trainee Gardaí next year, alongside a further 200 civilian staff.
There will be an extra €19m provided towards the Garda overtime budget.
The minister added work would continue to “free up Garda members to spend less time on administration and more time on the frontline and in our communities”.
He added there would be an additional €39m provided to the Irish Prisons Service, which will allow for the hiring of 150 more staff.
A further €11.5m will also be provided towards domestic and gender based violence initiatives next year.
Mr Chambers said there would also be additional investment in the international protection system to “increase capacity” and provide for the costs of international protection accommodation.
: For the Department of Rural Affairs, Mr Chambers confirmed there would be a total of €611m allocated for next year.
Measures set to be expanded include the community centre investment fund, which will provide for grants to refurbish community centres. This will receive an extra €3m.
The public expenditure minister also announced additional funding towards the Shared Island unit, with resources to be increased to €1bn out to 2035.
Projects set to be progressed in 2026 include the narrow water bridge between Louth and Down as well as the establishment of an air link between Dublin and Derry.
The basic income for artists scheme, which provides grants of €325 to artists in the scheme, will be made permanent. It is envisaged that the scheme will be expanded every year to allow an additional 200 artists to join, starting at 2,000.
Some €2.1m will be provided to Sports Ireland, while Culture Ireland will receive €800m. An additional €4.73m will be allocated across seven national cultural institutions.
A major redevelopment project at the Crawford Art Gallery in Cork will also be funded.
Some €357m will be allocated to the broadcasting section of the department, which will “help support the delivery of efficiencies and reform in RTÉ”, as well as supporting Irish language programme, and €4.4m for Coimisiún na Meán.
Some €291m will be given to sport, including €3m to support the establishment of League of Ireland football academies.
There will be €1.6m in funding for intercounty Gaelic games players.
The Department of Children's budget allocation seeks to extend the national childcare scheme to an additional 35,000 children, though there is no details on a fee cut for existing services.
The department says that it will increase capacity in the Core Funding model of 4.2% while fees will be maintained at 2021 levels. along with a 10% increase in capitation of the Access and Inclusion Model (AIM) which caters for children with a disability.
On disabilities, there will be €3.8bn for disability services which includes:
- 250 new residential places
- 1,400 day services for young people and 50 more for older adults
- 6,500 assessments of needs
- 150,000 home support and personal assistance hours.
The budget also aims to recruit around 1,000 staff in disabilities and to implement strategies around LGBTI+ people, Travellers and Women and Girls.
The Department's budget will also increase funding for Tusla by around €160 million to fund over 5,000 foster care placements and expand Special Care to 26 placements.
: Budget 2026 will provide for 1,717 new Special Needs Assistants. There will be 1,042 new teacher posts and 860 new special education teachers.
There will also be additional capacity for approximately 2,800 places for special classes and special schools.
There will be a new Deis Plus scheme to support disadvantaged students. Educational Therapy Services will be rolled out. This will be done on a phased basis, enabling “gradual access to essential therapy services” to special schools, special classes, and mainstream schools.
The School Transport Scheme will also see further investment, which will see 170,000 children avail of the service.
The standard capitation rates for schools will also increase on a per pupil basis. This will see the primary and special school rates increase by €50 from €224 to €274. The secondary school rates will increase by €20 from €386 to €406.
Some 108,00 third-level students will receive a €500 reduction in the Student Contribution Fee.
This will be the first permanent reduction in fees in 30 years, bringing the annual payment down to €2,500. Last year, due to cost-of-living measures, the cost was reduced to €2,000.
Some 20,000 additional students will become eligible for the SUSI grant, with the income threshold moving from €115,000 to €120,000.
There will be 1,100 new college places created across health and social care professions. This will include 25 medical places and 86 nursing posts at Ulster University and Queen's University Belfast.
Non-adjacent maintenance grant rates will also be increased.
Some €810m will be given to capital projects, including student accommodation projects at Maynooth University and UCD.
There will also be 11 technological university developed, alongside two new veterinary medicine colleges.
In the €4.7bn transport budget, the Government has committed to continuing projects like Dart+ and the Cork Commuter Rail and will commit €940m on public transport, where fees will remain at a reduced level.
The money will also see the Adare Bypass, the N5 Ballaghaderreeen to Scramogue and the M28 Cork to Ringaskiddy projects funded along with a €2bn investment in Dublin's Metrolink.
There will be €363m for sustainable mobility measures such as active transport and greenways and a total of €2.3bn for enhancing existing public transport networks and €1.7bn on roads and road safety.
A further €40m will go towards regional airports and €163m will go towards the Coast Guard and other maritime safety measures.
In climate, some €209m will be assigned to programmes like an €82m fund for a just transition in the Midlands and €64m to the EPA.
The Government will also pledge €724m on energy transformation, which will see a record €558m put towards energy upgrade schemes, while €157m will go towards the development of a circular economy, which will include the Maritime Area Regulatory Authority and protection of Ireland's waterways.
An additional €1.5bn will be added to the health budget, bringing the total allocation to €27.4bn for the year.
This will allow for the HSE to recruit an additional 3,330 WTE staff, with a focus on reducing the amount of agency staff used.
There will be between 220 and 265 new acute beds built, including 36 beds in the stroke rehabilitation units at Bantry General Hospital. There will be at least 280 new community beds.
There will be increased staffing and expansions of services in areas such as suicide prevention, traveller mental health initiatives, eating disorders, and increased access to Child and Adolescent Mental Health Services.
Another 1.7m home support hours will be provided in 2025, with 500 new Nursing Home Support Schemes clients facilitated.
There will also be an emphasis on capital protections, with progress towards the digitalisation of Irish healthcare records, the construction of the new maternity hospital and progressing the “Elective Care Strategy”.
The total social protection package will be nearly €30bn as part of Budget 2026.
There will be a €10 increase to all core social welfare rates. It will bring the weekly jobseekers allowance rate to €254 a week.
There will be a double Christmas bonus payment paid to 1.5m people.
The fuel allowance will be rolled out to 50,000 families in receipt of the working family payment. The income thresholds for the working family payment will increase by €60 per week.
The fuel allowance rate will increase by €5 to €38 per week.
The carer’s allowance income disregard will increase to €1,000 for a single person and €2,000 for a couple. The domiciliary care allowance will increase by €20 a month to €380.
The child support payment will increase by €8 per child for children under 12 and €16 for children over €12. It brings the payments to €58 and €78 repressively.
The hot schools meals programme will continue to be rolled out to the remaining primary schools, costing €330m to feed 440,000 children.
: Mr Chambers said the Budget 2026 package includes €2bn euros for social protection, €1.5bn for health, €1.2bn for public service pay agreement adjustments and €1.4bn euros for other supports.
“Overall, this will support an increase of 12,500 staff to deliver services directly to the public.”
This was broken down to more than 3,370 in the health sector, 2,600 in education, and “up to” 1,000 gardaí.
Mr Chambers also confirmed there would be €1.4bn provided to Uisce Éireann in 2026 to “build essential capacity to support new housing developments and to increase the resilience and sustainability of water supply”.
“This will help to further progress development of waste treatment plans across the country,” he said.
On energy, Mr Chambers said there would be €3.5bn provided to Eirgrid and ESB to “strengthen our energy security and accelerate our transition to renewable energy”.
Mr Chambers confirmed there would be a new housing activation infrastructure fund established, with €205m set to be allocated.
This is to support the work of the government’s Housing Activation Office.
On the overall budget for the Department of Housing, Mr Chambers said there would be a total of €11.3bn provided. €2bn of this will go towards meeting the social housing need, through schemes like HAP and RAS.
Of this, €7.2bn will be for capital projects.
Within this, €2.9bn will go on delivering “thousands of new build social homes” and for the second hand acquisition programme.
Mr Chambers said there would be €140m allocated to retrofit social housing, while €130m will fund the retrofitting of older people’s homes.
There will be €1.2bn provided to a new starter home programme, which will deliver these properties through supports like Help to Buy.
Public expenditure minister Jack Chambers is now on his feet, delivering his Budget 2026 statement.
He said the country must celebrate differences and fly the flag “together” as he said the country “stands at a crossroads”.
Speaking in the Dail chamber, he said for a long time Ireland traded on its advantages as a “small, open, agile” economy and how it chooses to invest, plan and manage its economic affairs now “will shape our country’s future”.
“Our vision is to create a thriving country where enterprise can flourish and people feel valued regardless of background, ethnicity, sexuality or gender.
A carbon tax increase will be applied to auto fuels from midnight and all other fuels on May 1 next year.
The rate of the tax will go to €71 per tonne of CO2 emitted.
The revenue arising from carbon tax is estimated at €121m next year, and €157m for a full year.
Concluding his speech, Mr Donohoe said the State’s finances are “in good shape”.
“Our employment is at a historically high level. Our schools, our hospitals, our public services are responsible for so much good in our society,” Mr Donohoe said.
“But we must build more homes. We must help those who need our help in a more targeted way.” Mr Donohoe said the Government needed to make choices within the budget and any attempt to do everything would weaken “our ability to be safe in a turbulent world”.
“This is why our tax changes must be of a certain value, and no more.
“Now is the time to steady ourselves on the path for the future.”
Focusing on the film industry, a tax credit to support the visual effects sector in Ireland has been announced.
This will provide a 40% rate of relief for productions with a minimum of €1m of eligible expenditure on visual effects.
The rate will apply up to a maximum of €10m per production.
Another entertainment industry, digital games, will see the digital games tax credit extended for six years until the end of 2031.
To support entrepreneurs the finance minister said he is increasing the lifetime limit on capital gains tax revised entrepreneur relief from one million euros to a million-and-a-half for disposals made from the start of 2026.
: The Government is to use €150 million of its tax package for "targeted supports for the most vulnerable."
Within the €1.3 billion tax package as announced by Paschal Donohoe in the Dáil is a €1,318 increase in the 2% ceiling on the Universal Social Charge (USC) to €28,000.
This is designed to ensure that those who are on the new minimum wage of €14.15 per hour will remain outside the highest rate of USC.
The USC concession for medical card holders will be extended for two years, ensuring those on less than €60,000 receive a reduced rate on the first €12,012 of earnings.
: The Government has announced that the rent tax credit of €1,000 per year will be extended for three years and mortgage interest tax relief will be extended to 2027, though the rate will be halved in the second year.
The measure will cost €38 million overall.
On investments, the budget will decrease the rate of investment undertaking tax, life assurance exit tax, tax on equivalent offshore funds and the rate of tax on some foreign life assurance policies from 41% to 38%.
The VAT rate on gas and electricity will be 9% until the end of 2030 under the Finance Bill and a tax disregard of €20,000 on profits on the manufacture of uilleann pipes will extend to the end of 2028.
Carbon tax will increase €63.50 to €71 per tonne of carbon dioxide emitted. This will add around 2c a litre to petrol, while a VRT relief for electric vehicles will be extended until the end of next year and benefit in kind on EVs will be extended for three years on a tapered basis.
On excise, a packet of 20 cigarettes will go up by 50 cent.
The bank levy will be extended until the end of 2026, but the overall target income of €200 million will remain.
: As expected, Mr Donohoe confirmed that the national minimum wage is to increase to €14.15 an hour.
That is a rise of 65c an hour.
The finance minister also confirmed there would be a further extension to mortgage interest relief for two more years, with it set to be reduced for its final year.
Mr Donohoe also confirmed the 9% VAT rate on gas and electricity would be extended until 31 December 2030.
Until now, it had been regularly extended for periods of six months.
“This should go some way to alleviating energy cost pressures across the year for households,” Mr Donohoe said.
: In preparing this budget, Mr Donohoe said that housing has been "at the forefront."
"We have made significant changes to the design of homes to help them become more affordable."
He has confirmed there will be a new Derelict Property Tax introduced.
Mr Donohoe said this will be charged at a rate of 7% on the market value of the property, saying this rate will not be lowered.
“Dereliction is a blight on our towns and cities. We need to bring those properties currently lying empty back into use,” Mr Donohoe said.
However, it will require a register of dereliction to be published in 2027, with the tax being implemented “as soon as possible” after this.
It is set to replace the Derelict Site Levy.
Mr Donohoe also confirmed there would be a cut to the Vat rate on the sale of apartments, going from 13.5% to 9%.
This will take effect at midnight and run until December 31 2030.
“This reduction will help address the viability gap in apartment construction as part of a social policy to deliver more and higher density apartments,” Mr Donohoe said.
Mr Donohoe also confirmed there would be “substantial changes” to the Living City Initiative, which can assist households to restore residential properties.
This will include allowing people access the tax relief if they redevelop properties built before 1975.
The scheme will also allow the redevelopment of over-the-shop properties.
More regional towns will be added to the scheme, such as: Athone, Drogheda, Dundalk, Letterkenny and Sligo.
Mr Donohoe also confirmed the rollover of income tax deduction for small landlords who retrofit their properties for the next three years.
Inflation is forecast to remain at around 2% next year, Mr Donohoe has said.
He adds: "I and the Government are acutely aware that prices remain high."
He said the first budget of this coalition Government’s term would deliver for citizens and “tackle the serious challenges of meeting our housing and investment needs”.
The Irish economy is forecast to grow by 3.3% this year and by 2.3% next year.
A further 63,500 jobs are expected to be added by the end of 2025.
: Paschal Donohoe is on his feet in the Dáil to deliver Budget 2026.
He says: "This budget builds up our resilience and help us to adapt at a time of historic challenge and change."
He adds: "We need to achieve more in a world that is dramatically changing."
He notes that widespread tariffs have been introduced and the world "has been pulling away from its near-universal commitment to free and open trade."
However, he adds: "Ireland will always be a global voice for co-operation and trade."
: Good afternoon, and welcome to the Irish Examiner's Budget 2026 live blog.
Stay with us for news and analysis across the day as the Government delivers the final budget before the next general election.
Oireachtas webcasting is provided by the Houses of the Oireachtas Service, in association with HEAnet, Ireland's National Educational and Research Network.
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