A €400 targeted energy credit, €15-per-week welfare increases and a cut to childcare costs are among proposals put forward by the Social Democrats in its alternative budget.
The party also wants to phase out tax credits for people earning €100,000 or more.
With the Government preparing to deliver the budget next Tuesday, Opposition parties have begun outlining the spending and tax measures they would introduce if they were in power.
The Government has signalled there will be no electricity credit for households in Budget 2026 as part of a move away from the temporary cost-of-living packages seen in recent years and a pivot towards permanent measures to help vulnerable households.
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Social Democrats leader Holly Cairns said this is welcome as her party has been saying “for a lot of years now, that those one-off measures, the untargeted payments, are not the right approach”.
She said her party’s alternative budget is “focused on driving down the cost of living, sustainably, for people” and “lifting children out of poverty”. It would also start to roll out a public model of childcare and build affordable homes.
[ Budget 2026: Increasing minimum wage could be ‘devastating’, say small businessesOpens in new window ]
The party’s proposals include a €400 energy credit for households with income of less than €45,000, a measure that would cost €320 million.
Minister for Social Protection Dara Calleary has been pushing for €12-per-week social welfare increases as internal Government budget talks continue.
The Social Democrats are calling for a €15-per-week increase in core welfare payments, including the State pension, at a cost of €1.15 billion.
For €375 million the party would abolish the means test for the Carer’s Allowance.
Finance spokesman Cian O’Callaghan said this measure would be paid for by tripling the Bank Levy, which applies to certain financial institutions, to raise €400 million.
He said bringing in a second tier of child benefit, at a cost of €772 million, would “lift about 40,000 children out of poverty”. The Government is examining such a measure but it will not be ready in time for this year’s budget.
The Social Democrats would spend €262 million on reducing childcare costs by €200 per month and invest €100 million in “new publicly owned not-for-profit childcare facilities”.
Housing spokesman Rory Hearne said the Social Democrats would “remove subsidies for developers, and then use that money to build modular homes factories so we can bring more housing on stream that people can afford”.
Environment spokeswoman Jennifer Whitmore said the party would set aside €1 billion for a wind energy fund as part of climate action measures.
The party’s alternative budget also includes €3.45 billion in revenue raising measures.
Mr O’Callaghan said his party’s alternative budget is based on the €9.4 billion in available funds for spending and tax measures. But, he said, the “key difference is that we are actually introducing measures to raise more revenue”.
The biggest revenue raising measure – estimated to bring in €805 million – is to begin phasing out income tax credits for the highest earners.
Mr O’Callaghan said the phasing out would be for people paid more than €100,000 and there would be a full removal of tax credits for those on more than €140,000.
The party would increase tax credits for lower earners by €300 at a cost of €522 million.
Taxing “super wealth” would raise €200 million while the party would increase the rate of employer pay related social insurance (PRSI) by 0.3 per cent would bring in €336 million.
Put to him that businesses would not be happy with the latter measure Mr O’Callaghan said Ireland is “way out of kilter with other European terms of employers’ contributions” and “we think 0.3 per cent is a manageable increase”.
He said the party would not reduce the VAT rate for the hospitality industry but is proposing a €50 million fund “to support small, independent, local cafes or businesses that might be struggling”.
The Social Democrats would seek to raise €245 million with a €5-per-night tourist tax.
Regarding the party’s proposal to abolish the means test for the carer’s allowance, Minister for Social Protection Dara Calleary cast doubt on the €375 million estimated cost.
Speaking in the Dáil on Wednesday, he said that figure was “taken from a costing carried out by the Parliamentary Budget Office” and it “assumes that some 25,600 carers would become eligible for the scheme if the means test was removed.”
He said his Department’s conservative estimates of the cost is “in the region of €600 million each year.”
Mr Calleary said that was based on data showing there were “some 146,000 care recipients in our country.
“In the absence of a means test, it is reasonable to assume a carer’s allowance payment could be paid in respect of each of these care recipients.”
Mr O’Callaghan replied in the Dáil saying: “If the Government had the courage to triple the bank levy, or if it disputed the figures from the Parliamentary Budget Office, and in fact a quadrupling of the bank levy would be needed to fund the €600 million the Minister cites, why not do that?
“The banks are making massive profits on which they are paying very little tax because they are writing off taxation on their profits against losses in previous years.”
