New Budget blow with Donohoe in ‘cost of living challenge' alert after €50 Child Benefit warning & welfare freeze plot

The Irish Sun

11-07-2025

BUDGET 2026 "will try to respond to the pressures households and businesses face" - but at a more normal level than the public has seen for years, it's warned.
Finance Minister
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Finance Minister Paschal Donohoe and Public Expenditure Minister Jack Chambers are both working on Budget 2026
Credit: Cillian Sherlock/PA Wire
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Michelle Murphy of Social Justice Ireland said social welfare must provide a safety net to lift people out of poverty
Credit: Social Justice Ireland
Calls have been made for all weekly core
But the Minister warned that because of
Speaking in Fermoy, Co
"But just because the rate of increase of prices has slowed down, does not mean that the cost of living pressures that many are facing are any easier. I absolutely understand that.
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"We do have to move to a more normal budget policy that we have had for a number of years."
Minister Donohoe said the balance has to be struck between spending
He said: "Every single budget that a Government brings forward and that the previous Government brought forward does find different ways of helping with cost of living challenges within our society.
"But we do have to get the balance right.
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"We are also living in very uncertain times - we have to be careful with our public finances. We also need to find ways that we can invest more in our future."
An independent think-tank has called for ALL weekly social welfare rates to increase by €25 and be benchmarked to average earnings in October's budget.
This would bring core payments to €269 a week in 2026.
Social Justice Ireland has also called for the
Minister for Social Protection Dara Calleary has already confirmed his department is "working on" a
payment as part of "key"
However, the Fianna Fail TD has
He said the move would cost the State €256.5 million.
"Income adequacy cannot be addressed by one-off measures as has been the case in recent Budgets."
Michelle Murphy
Social Justice Ireland
A
worth an average €285 each month would allow lower-income families to top up the existing €140-a-month benefit currently paid out to around 650,000 Irish families.
The €140 flat payment would still be paid to everyone, regardless of income.
Social Justice Ireland has also said the payment rate of
Michelle Murphy, Research and Policy Analyst for Social Justice Ireland, said the rate "is currently inadequate to meet even the most basic of needs and must be increased to the full adult rate".
But Tanaiste
He indicated that the Government may
EXPANSIONARY PACKAGE
TANAISTE Simon Harris told colleagues that the Budget will be an "expansionary package
Speaking in June at the
Although nothing has been confirmed and Harris said decisions have yet to be made, he told the meeting that the VAT rate for small businesses will be
He also said childcare fees must be permanently reduced over the lifetime of this government.
Harris also said the cost of education, across all levels, must be reduced along with healthcare costs, and significant progress should be made in children's disability services and special education.
The payment currently has a maximum rate of €244 each week for those who meet certain eligibility conditions.
Asked if the Government will separate the jobseekers allowance from other welfare hikes in the budget, the Tanaiste told the Irish Sun: 'I do always think there is merit in not looking at social welfare payments with uniformity across the board.
'We've been talking a lot about college fees the last couple of days unexpectedly perhaps but roughly speaking the equivalent of €1.20 or €1.25 on every social welfare payment is roughly the equivalent of
'I'm not convinced that you need to see as significant a rise in the dole as you do in the pension for example at a time when our country is in full employment and there's lots of supports out there for people getting into work and there is other supports out there for people who can't work for very many good reasons.
"That is my view but we will thrash all that out in the Budget and there's a long way to go."
ONE-OFF MEASURES BLAST
SJI's Michelle Murphy said that, even after the provision of social welfare payments in 2024, there were almost 630,000 people in Ireland
And she told how social welfare payments must provide an adequate safety net to lift people out of poverty and provide a "basic but decent" standard of living.
She explained: "Income adequacy cannot be addressed by one-off measures as has been the case in recent Budgets.
"Those reliant on social transfers need certainty. This is even more critical in light of
"Even with falling rates of inflation, prices will remain high placing real pressures on household budgets.
"Recent Budgets have focused on temporary measures. What is needed is certainty and permanence for those reliant on social transfers.
"A €25 increase is required to benchmark core social welfare rates to 27.5 per cent of average earnings and to address the impact of continued inflation on low income households, bringing core payments to €269 a week in 2026."
NO BUDGET 2026 BONANZA PACKAGE
But Finance Minister Donohoe emphasised that
He added: "Of course that budget will contain measures that will try to respond back to the pressures that businesses and households face."
The Budget 2025 package - the
It included two double
Budget 2025 also provided an additional October cost-of-living double payment as well as the usual social welfare Christmas bonus.
But Donohoe and Public Expenditure Minister
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Minister for Finance Paschal Donohoe
Credit: EPA/OLIVIER MATTHYS
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Minister for Public Expenditure Jack Chambers
Credit: Niall Carson/PA Wire