Indexation of welfare rates to earnings central to delivering on child poverty commitments
The commitment from both An Taoiseach and the Minister for Social Protection to prioritise measures that would address child poverty in Budget 2026 is very welcome, as is the intention of Government to ensure that there are targeted measures in place to support vulnerable households with the impact of ongoing price increases, particularly in essentials such as food, housing and energy.
Recent budgets have relied on a series of short lived, one-off measures accompanied by only small nominal increases in welfare. This has led to a widening of income divides, an issue that this government must deal with in the budget. 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.
Income adequacy
Child poverty does not exist in a vacuum. The more than 190,000 children living in poverty in Ireland live in families, households, and society. The current surplus of resources available to the Government represents a major opportunity to once and for all address this persistent and damaging problem by supporting the families of these children.
The best means to address child poverty, and to support vulnerable households is to prioritise low-income welfare dependent families in Budgetary policy. Our analysis has shown that prioritising these families works and leads to reductions in poverty. Unfortunately, recent Budgets have shifted away from this approach. Benchmarking social welfare rates to average earnings and indexing them against earnings going forward would help to mitigate the impact of rising costs, give long-term certainty to households on fixed incomes, and prevent widening income inequality.
Budget 2026, Children and Social Welfare
- Commit to indexation of social welfare rates to average earnings.
- Set 27.5 per cent of average earnings as the benchmark to begin system of indexation.
- Increase minimum social welfare rates by €25 per week to reach this benchmark.
- Increase the child benefit payment by €50.
- Increase the Qualified Child Allowance for children under 12 by €6 and children over 12 by €15.
Extend fuel allowance to families in receipt of the Working Family Payment.
Budget Choices 2026 is available to download here.
Budget 2026: Indexation and Social Welfare Rates is available to download here.