An increase of €25 in social welfare rates required to close income gaps
In today’s (Thursday July 17th) Budget Forum, hosted by Minister for Social Protection, Dara Calleary TD, Social Justice Ireland will call on Government to prioritise vulnerable households, deliver on its commitment to progressive budgets, and to close the income gaps which have opened as a result of temporary measures in recent budgets.
Prioritise vulnerable households
Income gaps have grown in recent years. Looking at permanent changes in taxation and welfare over the period 2020-2025, budgetary policy has reduced the gap between households in the bottom and middle of the income distribution while opening a greater gap between them and households on the highest incomes. Last year’s Budget put €1,214 per annum more into the pockets of someone on €100,000 a year than it gave to someone on the lowest income. Reversing these growing income gaps must inform Budget 2026.
Increase current social welfare rates by €25
The benchmarking of core social welfare rates to average earnings and a €25 increase in core social welfare payments in Budget 2026 is essential to closing this income gap, and to delivering the Programme for Government commitment to progressive budgets. This is part of a suite of targeted measures to support households on fixed incomes. Social Justice Ireland are also calling for the equalisation of Jobseeker’s rates for young people under 25, and the introduction a cost of disability allowance in Budget 2026.
Address income adequacy
A lesson from past experiences of economic recovery and growth is that the weakest in our society get left behind unless welfare increases track increases elsewhere in the economy. Even after the provision of social welfare payments, in 2024 (the latest data available) there were almost 630,000 people in Ireland living below the poverty line, including 190,000 aged under 18. Income adequacy cannot be addressed by one-off measures as has been the case in recent Budgets. Those reliant on social transfers need certainty and permanence. Adequacy must be embedded into our social protection system if we are to address poverty and meet our national poverty targets as set out in the Roadmap for Social Inclusion 2020-2025.
Summary of Social Justice Ireland proposals:
Minimum Social Welfare rates: A social welfare payment must provide an adequate safety net to lift people out of poverty. This is even more critical in light of increases to essentials such as rent, energy and heating costs, the risks to food security. As a start Budget 2026 should increase minimum core social welfare rates by €25 per week. The rate of jobseekers for those aged between 18 and 24 (not living independently) is currently inadequate to meet even basic needs and must be raised to the full adult rate.
Indexation: Social Justice Ireland supports the indexation of minimum social welfare payments to ensure recipients do not fall behind the rest of society. Government should commit to benchmarking core social welfare rates to 27.5 per cent of average earnings in Budget 2026. This benchmark should be used as the starting point in the development of an indexation system for social welfare rates.
Older people: Even with temporary cost of living measures, the poverty rate among older people increased by 64 per cent in 2024, with more than 106,000 older people struggling to make ends meet. Older people are particularly vulnerable due to their overwhelming reliance on a fixed income. Government should increase the State Contributory and Non-Contributory Pensions by €25 per week and universalise the payment, starting in January 2026.
Increase the Living Alone Allowance by €10 a week in Budget 2026 to support older people living alone.
Fuel Allowance: Increase the fuel allowance by €10 per month and extend the payment to those in receipt of Working Family Payment. This also unlocks secondary benefits such as access to retrofitting grants.
Bereavement Grant: Recent research from the Irish Hospice Foundation shows that 30,000 households every year are impacted by a bereavement with many facing difficult and unforeseen costs. The Bereavement Grant should be reinstated at the rate of €850 per person deceased.
Disability: The group in Irish society with the highest risk of poverty are those who are unable to work due to long‐term illness or disability. Social Justice Ireland believes that the introduction of a cost of disability allowance at €20 a week is vital to address the high rates of poverty experienced by this group.
Carers: Carers provide a huge service to the State. According to the latest census data there are over 299,000 unpaid carers in Ireland providing unpaid care each week, an increase of 53 per cent in six years. To acknowledge and support the work of carers in Ireland, at the very minimum in Budget 2026 Government must:
Expand the Free Travel scheme to include people in receipt of Domiciliary Care Allowance.
Increase the annual Carer's Support Grant to €2,150.
Implement an independent review of Carer’s Allowance.
Increase the Domiciliary Care Allowance to €385 per month.
Pilot a Universal Basic Services and a Universal Basic Income Scheme for Carers at a cost of €10m in line with the Programme for Government Commitment to a Carers Guarantee.
Children: Child benefit remains a key route to tackling child poverty and is of particular value to those families on the lowest incomes. In 2024, more than 190,000 children in Ireland were living in poverty. As a first step towards investing more to address, reduce and prevent child poverty in Irish society Social Justice Ireland proposes:
an increase of €50 in the Child Benefit payment in Budget 2026.
an increase to the Qualified Child Allowance for children under 12 by €6 and children over 12 by €15.
an additional two weeks paternity leave.
an additional two weeks of paid parental leave.
Expansion of the Hot School Meals Programme to all DEIS second level schools.