Bill-payers to get €200 energy credit in April under cost-of-living package

A 20 per cent cut in public transport fares beginning in April and an increase in the energy credit from €100 to €200 are among a number of measures announced by the Government to help people with the cost of living.

The total cost of the measures agreed is €505 million, with over two million households due to be paid the €200 energy credit in April, the Government said.

There is to be a one-off payment of an extra €125 for people in receipt of fuel allowance.

The threshold for the drugs payment scheme is to be cut from €100 to €80, and changes to the working family payment are to be brought forward to March.

Minister for Public Expenditure Michael McGrath and Minister for Finance Paschal Donohoe announced the package of measures on Thursday evening.

Mr Donohoe described the package as “significant” but denied it amounted to a mini-budget, saying the Government had not decided to make changes to taxation or core social welfare rates.

He said the package would keep the Government well within the €7.7 billion borrowing threshold that was announced in the budget, and said it would not have a measurable impact on inflation.

Mr McGrath said the €200 energy rebate and the €125 increase in the fuel allowance would be temporary measures as would be the 20 per cent reduction in public transport.

Mr McGrath estimated that the energy measures will cost €430 million of the €505 million package.

The measures include:

* An increase in the energy credit from €100 to €200 including VAT, estimated to impact just over 2 million households - to be paid in April;

* A 20 per cent reduction in public transport fares - to apply from April until the end of the year;

* A lump sum payment of €125 on the fuel allowance will be paid in early March to 390,000 recipients;

* A reduction of the drug payment scheme threshold from €100 to €80 - this sets the maximum sum someone will have to pay in a calendar month for approved prescribed drugs and medicine;

* The working family payment budget increase announced on Budget Day will be brought forward from June 1st to April 1st;

* Reduced caps for multiple children on school transport fees to €500 per family post primary and €150 for primary school children.

The transport price cuts, set to cost around €50 million, will come on Bus Éireann, Irish Rail, Dublin Bus, Go Ahead, Luas, DART and Local Link services.The reduced fares will be in place until the end of 2022.

Commenting on the package, Mr McGrath said it “will make a positive impact on the incomes of all households in our country”.

He added: “Other key expenditure measures include reductions in fees and charges across a range of government-provided services”.

However, Sinn Féin is calling for a series of payments to citizens, totalling €1.4 billion, to combat increased living costs, claiming the measures due to be announced by the Government “will only scratch the surface”.

In advance of the announcement, Sinn Féin's finance spokesman Pearse Doherty said: "A Sinn Féin government would make a direct cost of living cash payment to support workers and families, in addition to making the already announced €100 electricity credit available.

“An individual on an income of up to €30,000 would receive a cost of living cash payment of €200 and an individual on an income of between €30,000 and €60,000 would receive a cost of living cash payment of €100.

“This payment, along with our proposal to put a month’s rent back in people’s pockets and axe the carbon tax hike which is due in May would give hard pressed workers and families the relief that they so badly need.”

Dáil exchanges

Speaking in the Dáil, Tánaiste Leo Varadkar said no matter what the Government announced on Thursday "it's not going to be enough" for the Opposition.

Accusing Sinn Féin of being overly-negative, he said the party was making “cheap promises” to the electorate and he believed Sinn Féin’s press release was “already written” before Thursday’s announcement.

Under its proposals, Sinn Féin is also recommending an increase in the minimum wage by 50 per cent, an extension of the fuel allowance by two weeks and an expansion of the fuel allowance to those in receipt of the working family payment.

Asked if the package could drive inflation higher, Mr Doherty said that most of the package consisted of once-off payments, and the pressures on energy prices were not a “demand problem”. He said that freezing rents would ease inflationary pressures in the sector.

Mr Doherty said the State needed to get “money into people’s hands now”, adding the Government didn’t understand the challenges facing ordinary workers and families.

Mr Varadkar said the the Government was committing “a lot of money” to help people.

“Your [Sinn Féin’s] press release is all already written; inadequate, not enough. I could write it for you, in fact it was probably written days ago.

“But promises are cheap, and promises are easy, and the public, more and more are seeing through you,” the Tánaiste said.

"They see what you're not doing in Northern Ireland to help people with the cost of living and they know that promises are cheap. It's so easy for any opposition party to say they're going to do twice whatever the Government is going to do but people see through that and they know it's not honest."

Bertie-nomics

Labour TD Aodhán Ó Ríordáin said the Tánaiste was engaged in "Bertie-nomics", "trying to convince people that you can cut their taxes and tinker around the public service and that would all be fine".

Mr Ó Ríordáin said the package of measures due to be announced were “token measures” and would be “a drop in the ocean compared to what ordinary families are having to grapple with”.

He said it was time for the Government to “shop around for some new ideas” and that a mini budget was needed as well as rent freeze and pay rises for people.

People Before Profit TD Richard Boyd Barrett said the country was facing a cost of living "emergency".

“Working people, pensioners, the least well off, are being absolutely crucified by the stratospheric increase in the cost of accommodation, rents, energy prices and all sorts of other costs of living rising,” he said.

“What absolutely infuriates me is that the Government pretends like this is like the weather, that ‘it’s not really to do with us, it has something to do with international pressures, it’s not our responsibility and we can’t really do anything about’.”