Budget 2024: One-off cost-of-living measures are ‘cold comfort’ for many

AN overall cost-of-living package including energy credits, social welfare payment increases, and a one-off contribution to recipients of the fuel allowance worth €2.7bn in the budget announced in the Dáil yesterday would be “cold comfort” to the hundreds of thousands of people frozen out of Ireland’s economic recovery.

Following the announcement of the budget yesterday, both Social Justice Ireland and St Vincent de Paul (SVP) welcomed the one-off measures contained in the budget, but said that they were insufficient to tackle the crisis being experienced by families on the breadline across the country.

SVP said it would have been better to benchmark the social protection system.

Finance Minister Michael McGrath and Public Expenditure Minister Paschal Donohue outlined a raft of measures to help people cope with the escalation in the cost of living, including a €12-per-week increase for social welfare recipients, three credits of €150 for each household to help meet electricity and gas bills, and a double welfare payment in January as well as the Christmas bonus in December.

Other Budget 2024 measures aimed at helping families and people living alone to meet the increased cost of living included a €300 fuel allowance lump sum, a €200 living alone allowance payment, a double month of child benefit, and a €400 working family payment lump sum.

The cost-of-living package also included a double payment of foster care allowance before Christmas, a €400 lump sum to selected welfare categories, and a €100 payment for a qualified child.

Other measures aimed at helping working people struggling to balance their budgets included a €1.40 increase in the minimum wage to €12.70 per hour, a tax credit for renters, and a widening of the reduced public transport fare scheme to include 19- to 25- year-olds.

Public Expenditure Minister Paschal Donohue, introducing the cost of living measures, said that inflation was falling and energy bills were decreasing, adding that he was conscious that many people listening to the announcements were concerned about “rising costs, and particularly the challenges of heating and lighting their homes this winter”.

“This budget provides an immediate and substantial response across 2023 and 2024,” he said.

“Our supports are targeted to the families that need them most — older persons, households with young children, and people with a disability.”

'Ireland's vulnerable trailing behind'

According to Social Justice Ireland, however, the measures contained in the budget had “left Ireland’s vulnerable trailing behind”.

In its response, the advocacy organisation said that the social welfare rates increase failed “to make up for the impact that inflation continues to have on poorer households”.

“A €25 boost was the minimum required for Government to benchmark rates to 27.5% of the average weekly earnings,” the organisation said, pointing out that the €12 increase did not meet even the “modest target” the then Government had set as far back as 2007.

“This budget fails the poorest again, they are being left behind without any hope of enjoying the fruit of Ireland’s current prosperity.

“There’s no attempt at all to reduce poverty in line with the Government’s own targets in the Roadmap for Social Inclusion 2021-25.”

The organisation welcomed the raft of one-off measures, but said they were no solution to the challenge of poverty and income adequacy.

“Indeed, when the one-off measures are stripped out, households on fixed incomes have been left behind again.

“A more appropriate increase in all core weekly welfare rates would enable households to buy essentials routinely, and not as treats.”

The ‘reliance on one-off measures’ left households exposed to the increasing cost of living, St Vincent de Paul warned in its response to the budget.

It described the focus on one-off measures rather than “benchmarking the social protection system” as a “disappointment”.

The €12 increase in social welfare payments was described as a “real-term cut” and “less than half of what was needed to keep pace with rising living costs”.

While there was a welcome for some measures, including free school books for Junior Cycle students and the payment of child benefit to students who are 18 and still in school.

SVP head of social justice Tricia Keilthy said that the budget was a real test of the Taoiseach’s commitment to addressing child poverty, and said that it had delivered on a number of fronts.

“However, we are dismayed to see the qualified payment to the poorest children will only increase by €4, which is well below the recommended increase of €10 for children under 12 and €15 for children over 12,” said Ms Keilthy.

“The inadequate increases in core rates will also mean families forgoing essentials as they still grapple with the cost-of-living crisis.”