Why Core Social Welfare Rates must increase by €20 in Budget 2023

A €20 increase in core social welfare payments in Budget 2023 must be part of a suite of targeted measures to support households on fixed incomes.  A social welfare payment should provide an adequate safety net to lift people out of poverty. This is even more critical considering increased costs of essentials such as rent, energy and heating costs, and the risks to food security.

A €20 increase in core social welfare rates would set Government on the correct path to benchmark social welfare rates to 27.5 per cent average weekly earnings over a two-year period, which was the standard set in 2007.  Meeting this benchmark is a crucial first step in addressing income adequacy challenges for people dependent on social welfare.

Rising costs are impacting on everyone in Irish society.  Those most impacted are households on low incomes; people on low hourly wages or on a fixed income.  Supporting these households requires ongoing targeted measures, not one-off payments.  In addition to an immediate increase of €20 per week in all core social welfare payments, the introduction of refundable tax credits and a commitment to deliver a Living Wage of €12.90 per hour for those on low pay are necessary in Budget 2023 to support low-wage households. 

Investment – People and Public Services

Targeted measures to support welfare dependent households must be an essential part of the evolving policy response to the current experience of rising living costs and an increase of €20 in core social welfare rates should form a central part of the policy measures adopted as part of Budget 2023.  If not, those on the lowest incomes will be left behind.

Households in the middle are also being impacted by rising costs, households who don’t qualify for supports such as the Fuel Allowance, the Working Family Payment or the Back to School Clothing and Footwear Scheme.  The Government is right to want to support these households and the most effective way to reduce costs for these households in the long term is a strategy of investment in public services.

One of the highest costs facing families with young children in Ireland is the cost of childcare.  Government should invest an additional €115m in early years in Budget 2023, including non-contact time.  In addition, Social Justice Ireland proposes an additional two weeks paternity leave in Budget 2023 and an additional two weeks of paid parental leave and an additional €30m in Core Funding for the childcare sector in Budget 2023 to support wages in the sector. Government should also explore how a National Childcare Fund could be established, modelled on the operation of the National Training Fund.

Budget 2023 must prioritise long-term investment in housing, in renewable energy and in people and public services to support these households and to make a meaningful impact on reducing the cost of living.  These are strategic investments that will also improve the standard of living of everyone in society.

Investment - Housing

Housing, and social housing provision in particular is one of Social Justice Ireland’s priority areas for strategic infrastructural investment.  Housing affordability continues to present a serious issue in Ireland with prospective homeowners facing house price increases of 15.2 per cent this year, and renters facing annual increases of over 11 per cent.  In addition to the affordability crisis, we also have a persistent homelessness crisis, with the number of people accessing emergency homeless accommodation exceeding 10,500 in July 2022.

To begin to address this challenge, Government must set a target of social housing stock that is 20 per cent of the overall housing stock by 2030.  To achieve this Government must double its Housing for All targets for social housing in Budget 2023 at an additional cost of €1.4bn.

With over 60,000 social housing tenants renting from the private rented sector, the most logical solution would be to invest in scaling up the provision of social housing, thereby making private rental properties available for tenants. This would not only have a positive impact on rent costs, but would be more cost-effective to the State in the medium to long term.

In addition, the Help to Buy Scheme, which is contributing to the affordability crisis by keeping prices artificially high should be wound down, and the €200m saving invested in Housing First for Families.

Investment – Energy and a Just Transition

Budget 2023 provides an opportunity to ensure that our investment strategy supports our long-term energy needs, the ambition of the climate action plan, and a just transition to a green economy and a vibrant society.  Energy supply, climate investment and Just Transition, are another priority area for strategic investment.

Energy is one of the key drivers in the increased cost of living.  To meet our own energy targets, increase renewable energy supply and deliver long-term sustained reductions in energy costs Government must invest in renewable, divert fossil fuel subsidies to support renewable energy and invest substantially to improve and upgrade our energy infrastructure.

Meeting our 2030 targets will be challenging, and every sector must make a fair contribution.  Government should introduce a windfall tax on excessive profits made by oil companies and energy suppliers.  This would yield approximately €100m in Budget 2023 to be invested in renewable energy and programmes to eliminate energy poverty. 

Government should also begin the process of ending fossil fuel subsidies and environmentally harmful tax expenditures in Budget 2023. These not-insignificant resources (€2.2bn in revenue foregone in 2020) should diverted to renewable energy programmes, reforming and expanding the fuel allowance, incentivising sustainable agricultural methods and additional investment in Just Transition Programmes to support rural communities who will be among the most impacted by necessary yet challenging climate policies.

Pre-Budget Submission

Social Justice Ireland's pre-budget submission is available to download here.  It contains detailed, fully-costed Budgetary packages across more than a dozen policy areas including health, housing, education, welfare, sustainability and more; it also contains a range of costed, revenue-raising proposals.