Budget will not increase weekly payments for pensioners

Pensioners will not receive an increase to their weekly payments but will instead get other smaller welfare increases under plans being considered for the budget.

Government sources said pensioners are likely to see an increase in other allowances such as the home benefits package, which includes support for paying gas and electricity bills.

Recent years have seen a €5 increase in the weekly pension payment, and Fianna Fáil social protection spokesman Willie O’Dea is insisting on the same this year.

Negotiations between Fianna Fáil and Minister for Finance Paschal Donohoe on the October 8th budget, which is being prepared to deal with the impact of a no-deal Brexit, are at an early stage.

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Mr Donohoe and Fianna Fáil finance spokesman Michael McGrath have said there will be no income tax cuts. The Government has also indicated that the welfare package will be significantly lower than in recent years.

Well-placed sources said the package is likely to be around half of what it was last year, when €360 million of new spending was introduced. Of that, €270 million went towards a €5 across-the -board increase in all weekly social welfare payments, although the increases did not kick in until the end of March.

It is understood the overall figure being examined for the welfare package this year is between €150 million and €200 million.

Not feasible

Some sources said it would not be feasible to pay a weekly increase to pensioners only. The focus is instead on small measures rather than sweeping increases in rates.

Current proposals under consideration for the budget, the last before the general election, are to give “nothing on the pension”, a source said.

However, other allowances such as the home benefits package could increase. This provides people aged over 70 with €35 per month to help with gas or electricity bills as well as a free television licence, although only one person per house can qualify.

There will be a budget day package of €2.8 billion, of which €2.1billion has already been committed.

Mr Donohoe also has the option to raise other taxes, such as excise on diesel, to increase the money he has to spend.