While Budget 2025 won't be announced until the 1st of October, Ministers are already at work deliberating on the measures they are hoping to roll out. And Minister for Social Protection Heather Humphreys has hinted that pensioners will be in line for an increase.
Speaking to the press last week about reports that the pension would rise by €20, she replied: “I absolutely agree that pensioners should be prioritised in this budget along with carers and people with disabilities. As we do every year, we will work out a budget that is targeted at those most in need. Given the fact we are at full employment, I am not sure if there is a policy rationale for increasing the payments on those who are long-term unemployed. We have a lot of supports to help people get back into work.
“A €20 increase across the board in social welfare would cost €1.5bn, and there are other Ministers looking for increases in their budget so it’s about sitting down and working out a budget that targets those most in need.” She also singled out carers and pensioners as needing supporting and said “I do think we should focus on that cohort.”
Cost-of-Living Measures in Budget 2025
The October budget will include a new cost-of-living package that will help families and householders this year, the Taoiseach has said. Simon Harris stated that it is important Budget 2025 features a cost-of-living package as people are “still financially hurting”.
Speaking at Government Buildings, Mr Harris said the Government is looking at measures to help people “in the here and now”.
“In relation to the Budget, yes, there will be a cost-of-living package this calendar year,” he added.
“I think it’s very important that there is one. People are still financially hurting.
“While we can point to many indicators that show that inflation is very significantly reducing, it’s entirely true, it doesn’t take away from the fact that that hasn’t been felt yet at homes, businesses, farms, right across Ireland.
“Therefore, I do think it’s important that we look at a time when the country is doing economically well, and what more practical measures we can take to help people in the here and now.
“Obviously, the composition of the package, the size of it, and all of that will be a matter for engagement across government, and will be announced on Budget Day, on the first of October.”
Inflation Drop Impacts Scale of Cost-of-Living Package
Minister for Public Expenditure Paschal Donohoe has downplayed suggestions of a substantial cost-of-living package in the budget in October by emphasising the sharp drop in inflation during the course of the year.
Mr Donohoe said there would be a package as prices were still high and the Government would continue to help families address the impact of the cost of living.
However, in an indication that the package will fall short of the €2.7 billion announced in one-off measures in last October’s budget, Mr Donohoe said the rapid decrease in inflation would have an impact on the scale of the spending package when Budget 2025 is announced on October 1st.
“Because inflation has come down so quickly, it will have an impact on the nature of possible new measures that we will enact come budget day,” he said.
Budget 2025 Cost-of-Living Measures to Be Rolled Out by Year-End
Speaking at the Government Buildings today, Donohoe said Budget 2025 will see a total of €105.4 billion in expenditure being made available.
“Budget 2025 will provide for an additional €6.9 billion in expenditure next year. Of this, €5.1 billion will cover the costs of meeting existing level of service requirements in 2025,” he said.
Taoiseach Simon Harris, along with Finance Minister Jack Chambers, have confirmed that the budget in October will include a cost-of-living package.
Donohoe said today that has the ability to do cost-of-living measures, “but we will have to pay for and account for them within 2024″, he said, meaning any one-off measures will have to be rolled out before the end of the year.
He explained this is consequence of the new budget rules implemented by the European Union.
Automatic Enrolment Pension Scheme
It comes as the government are set to roll out the new Automatic Enrolment Retirement Savings System from January. Workers are to see their pension investments double under the new state scheme. Under the scheme, the employee, employer, and Government all pay a certain amount into the employee’s pension fund.
A new public body, the National Automatic Enrolment Retirement Savings Authority, will be set up to administer the Auto-enrolment scheme. The scheme will be supervised by the Pensions Authority. You will be automatically enrolled in the new pension scheme if you are an employee and:
- You are between the ages of 23 and 60.
- You earn €20,000 or more per year.
If you previously contributed to a pension but don’t anymore, and you meet the other conditions, you will be automatically enrolled. If you earn less than €20,000 per year, or you are not age between 23 and 60, you can choose to join the pension scheme if you are not already part of a pension plan.
Focus on Long-Term Unemployed
Social Protection Minister Heather Humphreys has hinted that there will likely be a double child benefit payment and no increases to the jobseeker’s allowance in the upcoming budget.
Ms Humphreys said the pensioners, carers and people with disabilities should be prioritised in Budget 2025.
She said the double child benefit payment paid out at Christmas time was “extremely popular” and said there are not many people that do not need that payment as costs such as groceries were still high.
As Ireland was still at full employment, the minister said she does not believe there is a policy rationale for increasing welfare payments to those who are long-term unemployed.
She highlighted a recent change to jobseekers’ benefit that will see people who are let go from their jobs receive a higher rate of payment linked to their pay over a three-month period.
“For those that are long term unemployed, there are many, many opportunities for them to take offers of work,” she said.
She also said that a 20 euro increase for all social welfare payments would cost 1.5 billion euro.
“I think it’s important that we support people in the budget that can’t work. So some people with disabilities can’t work. Some of them can, and we’re trying to help them in that area too, but generally speaking, people with severe disabilities cannot work.
“People who are caring, they’re providing a service, and they’re helping somebody to remain in their home, and they often can’t work.
“Pensioners, they have they have done their piece. They have worked hard over their lives, and now they’re retiring.”
Budget 2025: A Balancing Act
The Irish government faces a balancing act in crafting Budget 2025. On the one hand, they are facing pressure to address the ongoing cost-of-living crisis, with families and households still feeling the strain of rising prices. On the other hand, they must also be mindful of the need to maintain fiscal responsibility, especially with the recent drop in inflation. The focus on pensioners and other vulnerable groups, combined with the planned cost-of-living package, suggests that the government is attempting to strike a balance between addressing the needs of those most impacted by the cost-of-living crisis while also ensuring long-term economic stability. It remains to be seen how the government will reconcile these competing priorities, but the final budget announcement on October 1st will provide a clearer picture of the government's approach to these pressing issues.
