Welfare payments including the fuel allowance are to increase by €5 under a deal struck by the Minister for Social Protection Heather Humphreys ahead of the publication of the budget tomorrow.
Pensioners will receive an extra €5 while other welfare payments such as the jobseekers payment and maternity benefit will also increase by the same amount from January.
The Christmas bonus will be paid in full while the back-to-school allowance will increase by €10. The €5 increase in the fuel allowance will take effect from budget night, however, as Ministers remain concerned about backlash over the planned increase in the carbon tax.
The budget package is expected to amount to about €4.7 billion, of which €1 billion is believed to be available for new spending with €500 million allocated for tax measures. It is widely expected that one of the headline tax measures will involve the indexing of tax credits and bands to offset the impact of inflation on people’s take-home pay.
Much of the €500 million for tax measures will be spent on this. Carbon tax will rise by €7.50 per tonne as part of efforts to reduce greenhouse gas emissions by 7 per cent per year.
It is expected that there will be 50 cent imposed on a packet of 20 cigarettes.
Alcohol looks likely to remain untouched as the Government is aware of the pressure on the hospitality industry because of the Covid-19 pandemic.
An extension to the Help to Buy scheme is expected. The scheme offers a tax rebate to first-time buyers of new homes and is due to run out at the end of the year.