Minister defends budget social welfare increases amid criticism

Ministers have defended the level of social welfare increases and tax breaks for renters in the budget amid claims the measures do not go far enough.

There are to be €12 per week increases to social welfare payments, including the State pension, from January.

There had been calls from non-governmental organisations for the increases to be €20 per week or more.

At a post-budget press conference, Minister for Public Expenditure Michael McGrath responded to criticism of the €12 rate saying a balance had to be struck.

ECB’s Schnabel sounds cautious note on pace of rate cuts

---

VHI cancelled our policy over a year ago without us knowing. Now they want us to pay €7,000 in arrears

---

Euro zone inflation to fall faster than expected, EU says

---

A reader complains to VHI: If the new policy has the same benefits, why charge €284 more?

---

“We sought to provide as much support as we possibly could to people and I think people in receipt of social welfare, whether they be carers or people on disability allowance or pensioners, will look at it in the round.”

He said they will also see separate lump sum payments in the coming weeks.

Mr McGrath gave the example of a single pensioner living alone who is in receipt of the fuel allowance, saying they will get an extra €2,400.

“By any yardstick, it’s a very significant contribution by the Government,” he added.

He said: “We know it’s going to be tough, but we’ve done the very best that we can today.

“A €20 increase in core weekly rates would alone cost €1.5 billion, which was essentially the entire envelope that I had for new measures across the entirety of Government, so it just wasn’t possible to go that far.”

Mr McGrath said: “I think by providing a whole range of payments, including the Christmas bonuses, a separate double payment and then lump sum payments for different welfare recipients ... we’ve gone a very long way when you add it all up.”

[ Budget 2023 main points: Details of the tax, rent, childcare and cost-of-living measures ]

[ Budget 2023 calculator: How this year’s budget will affect your disposable income ]

The planned €500 rent tax credit for tenants was attacked by Sinn Féin in the Dáil as finance spokesman Pearse Doherty said: “It’s less than the rent increase every year”, and will just go into the pockets of landlords.

Minister for Finance Paschal Donohoe said it will amount to €1,000 for 2022 and 2023 and it should be seen “in the context of all of the other changes that we are making”.

He cited measures such as increased financial support for childcare and tax cuts for middle income earners, and said that taxpayers will evaluate the budget by the “impact it makes in their wallet”.

“If I hadn’t brought forward any such measures, Sinn Féin would be condemning me for doing it,” he added.

The budget includes funding of €23.4 billion for the Department of Health. In the past, the high-spending department has struggled to stay within its budget and has sought additional funding.

Asked if he expected the department not to come looking for more funding next year, Mr McGrath said: “We expect all departments to manage their budgets.”

He added: “We have a general Government ceiling of about €90 billion for 2023 ... my job is to deliver public services and to deliver effective financial management on the expenditure side within that ceiling.”

Mr McGrath said there is a dedicated group overseeing the health budget.

He added: “It has been a very challenging period for health — there’s no getting away from that.

“Covid presented massive difficulties for them and we had to provide a lot of extra expenditure but ... we have added about 2,000 beds to the system on a permanent basis and about 15,000 staff in the last two years.

“They’re getting a further increase of €1.1 billion for 2023.

“And Minister [Stephen] Donnelly, I think, has put together a really good package of new measures that he intends to fund out of that.”

Asked if there is contingency funding for the new national children’s hospital — where costs have spiralled — Mr McGrath said there has been no request for extra funding for the project and the Department of Health has met costs from within its existing budget.

The project is expected to cost €1.7 billion but there are fears it will be higher due to delays caused by the Covid-19 pandemic and inflation in construction costs.