Cost-of-living package: From energy supports to welfare, here’s what to expect (via IrishTimesBiz)
One is additional energy credits for all households. A total of €600 in energy credits was announced in the budget last October, with the final €200 of those to be paid in March. Either an additional €200 will be paid in May, or the Government may commit to reconsider another payment heading into next winter.
Lobby groups and Opposition parties are arguing for permanent income boosts for some of these groups via higher core welfare rates, but for now the Government looks set to stick to temporary measures, returning to the issue of base welfare and pension rates in the next budget.This is a real hot-button issue, particularly for rural Ireland. Excise cuts worth 20 cent on a litre of petrol and 15 cent on diesel that have been in place since last March are due to run out at the end of February.
A call will also have to be made on the extension of the lower 9 per cent VAT rate applied to gas and electricity bills. This looks likely to be extended in some form, given these bills remain so high.Signals had been that the 9 per cent VAT rate on accommodation and food would go back to 13.5 per cent at the end of this month.
Revenue from a special windfall tax on the profits of some energy companies – set to raise several hundred million euro – will also help pay some of the bills. A key political problem here is that the hit to living standards from higher prices is likely to linger – even if inflation falls, prices will remain high. So McGrath and Donohue will face ongoing pressure to adjust core welfare and pension rates and introduce permanent supports in the run-up to next October’s budget.
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