Cost of living budget
Cost of living challenges are an issue of adequate income. Households on fixed or low incomes are already fully stretched financially and have endured almost four years of increased costs in the basics – food, energy and housing. As price increases seem set to continue, Budget 2027 must focus on long-term, targeted measures to support fixed income households and lower wage earners.
Fixed income households and lower wage earners have seen the greatest erosion in their purchasing power in recent years and have been most impacted by rising costs. A cost of living budget must focus on long-term, targeted measures to support these households, addressing the income adequacy challenges they face. An effective cost of living budget would target resources where they are needed most, providing long term support to vulnerable households. Directing resources to lower paid earners and fixed income households would support Government to fulfil the Programme for Government commitment to deliver progressive budgets and address the persistent challenge of income adequacy.
A cost of living budget to support these households should:
- Increase minimum social welfare rates by €15 per week.
- Increase the PAYE and Personal tax credits by €5 per week ensuring all workers benefit from any proposed income tax changes.
- Introduce a system of refundable tax credits to make the tax system fairer for low income workers.
- Introduce a cost of disability allowance at €20 a week at in Budget 2027 which should be built upon in subsequent Budgets.
- Increase child benefit by €20 and increase Child Support Payments for those under 12 by €10 a week and €18 for those aged 12 and over.
- Extend the fuel allowance by a further four weeks.