Prospect of €15 increases to weekly welfare payments fades

The prospect of across-the-board €15 increases to weekly welfare payments is receding amid concerns over its impact on the wider €6.7 billion budget package and Coalition tensions.

Senior sources across Government said a more likely option at this juncture was a welfare package that included across-the-board increases, albeit at a lower level, accompanied by more targeted increases to other payments, and some one-off measures from the €1 billion-plus pot of money intended for in-year cost-of-living policies, which is separate from the budget.

One senior Government source said: “If you were to do €15 across the board, that blows a sizeable dent in your budget.

“Across-the-board core weekly increases are costly,” the source said. “There will have to be a core weekly increase, but the higher you go on that, the less you have for targeted measures, the less you have for every other department.”

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Fine Gael is not thought to be hostile to across-the-board increases, with a figure of €10 mooted, along with targeted increases such as to the Fuel Allowance or Living Alone Allowance. Some Coalition figures believe that at the moment, €10 increases are most likely to most payments, possibly with a lower rate for jobseekers payments amid concerns over it providing a disincentive to work.

The welfare budget is also set to be supplemented by one-off measures, a senior source said, adding that it would be “one-off measures central”.

The welfare package is likely to be watched closely by the Green Party, which has made its preference clear for increases to core rates and targeted payments.

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The Greens have been vocal about securing both across-the-board increases and hikes to targeted payments – including the Working Family Payment, Living Alone Allowance and Qualified Child payment. While Minister of State at the Department of Rural and Community Development Joe O’Brien has said he wants “double digit” increases, Coalition sources believe that doesn’t necessarily mean extending to €15.

Marc Ó Cathasaigh, the Green Party TD for Waterford, chief whip and social protection spokesman, told RTÉ on Thursday that the party wanted to see a “substantial increase in the basic rate of social protection measures” to counteract inflation which was hitting people on fixed incomes such as welfare recipients, as well as targeted measures. A green source said that didn’t necessarily mean €15 but said it would have to be “close”.

There is some frustration in the upper ranks of the Coalition over the fixation on the eye-catching measure, which was included in budgetary options papers published by the Tax Strategy Group. Extending €15 increases could be achieved if extra money was found for the €6.7 billion budget package before it is published on September 27th, one source suggested, but multiple sources said budgetary room for manoeuvre was limited by a range of factors, not least the prospect of a new public sector pay deal.

According to papers produced by the Tax Strategy Group, a €15 weekly increase would cost about the same as a €10 increase across the board mixed with €10 hikes to the Fuel Allowance, the Living Alone Allowance and an €8 increase for Qualified Children aged under 12 and €14 for those aged 12 and over.

A €10 increase across the board would cost €741 million. This could be combined with some targeted permanent increases, and one-off measures, sources said.

Speaking on RTÉ on Thursday, Minister for Public Expenditure Michael McGrath said a decision had not been made on whether social welfare increases would be across the board.

“That is a detailed decision that is yet to made. There are currently different rates attached to different social welfare payments.”