Government should prioritise social welfare rates in Budget 2027

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Budget

Social Justice Ireland appeared before the Committee on Budgetary Oversight to discuss the think-tank’s priorities for Budget 2027: protecting the vulnerable, reform of the taxation system and investment in social infrastructure.  

Social Welfare

  • Benchmark core social welfare rates to 27.5 per cent of average earnings and commit to achieving this over two budgets.
  • Increase core social welfare rates by €15 in Budget 2027 and a further €10 in Budget 2028.

The households most exposed to price shocks are in the bottom twenty per cent of the income distribution.  Protecting these households requires targeted, long-term measures that tackle poverty, address income adequacy and build resilience. 

Benchmarking social welfare rates to 27.5 per cent of average weekly earnings would allow Government to take a long-term approach to the persistent problem of households who are unable to make ends meet. Directing resources to lower income households would support Government to fulfil the Programme for Government commitment to deliver progressive budgets and address the persistent challenge of income adequacy. 

Reform of the taxation system

  • Increase the PAYE and Earned Income tax credits by €5 per week
  • Make the PAYE and Earned Income tax credits refundable.
  • Set a tax-take target on a per capita basis.

Government should increase both the Employee and Earned Income Tax credits by €5 per week providing additional support for workers. Increasing the tax credits alongside making them refundable would make Ireland’s tax system fairer, address part of the working poor problem, and improve the living standards of a substantial number of people.

In terms of fairness, concentrating any budget income tax package on increases to tax credits delivers gains to almost all working households and avoids a situation where many low-to-middle income earners are excluded from budgetary gains.

Government should use Budget 2027 to future proof the public finances.  It should outline a clear plan for broadening the tax base and increasing sustainable revenue, and set a tax-take target on a per capita basis. This would link Ireland’s overall level of taxation to population size and the related demand on resources.

Investing in social infrastructure

  • Increase planned social housing construction to 20,000 units.
  • Expand Housing First to families.

Government should scale up social housing delivery substantially to meet demand.  This begins with an annual target of 20,000 units for the next five years, up from the current 12,000 as committed in the Programme for Government. Government should utilise €2.2bn from windfall corporate tax receipt for investment in social housing construction and to reach an annual target of 20,000 units.

Family homelessness has increased by 140 per cent over the past decade.  The continued over-reliance on emergency accommodation is not working.  Government must prioritise prevention-focused policies and housing-first approaches to address family homelessness.  In Budget 2027, Government should extend the housing first approach to homeless families accessing emergency accommodation.

Our submission to the Committee is available here.

 

Budget 2027 Priorities - Committee Budgetary Oversight