Government plans to cut childcare costs as part of ‘cost of living’ budget

Kenneth Fox

Reduced childcare costs, the largest ever welfare package and lower taxes will form the basis of October’s “Cost of Living” Budget, the Government has said.

As the Irish Examiner reports, appearing to rule out an emergency budget, Taoiseach Micheál Martin said the measures will have to be “comprehensive and sustainable over a longer period of time”.

Tánaiste Leo Varadkar said a welfare package of more than €5 a week on the pension will be needed in October’s Budget.

Mr Varadkar said there will have to be a substantial welfare and pension package greater than that of 2022.

Last October’s budget saw the Government announce a package to bring in a €5-per-week increase in core welfare payments costing some €450 million. The increase in the payments came into effect in January.

While Mr Varadkar said the scale and detail have yet to be established, the determination of Government to address the cost of living is clear across all three parties.

Mr Varadkar said this is because the spike in inflation is not temporary, adding “it could go on for years”.

Short term measures

Mr Martin said cuts to childcare costs could be in place by Christmas while Mr Varadkar said: “We're determined to improve child care provision, quality of child care, in terms of conditions for staff and particularly reducing the cost of child care for working families."

Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath briefed the three government party leaders on the broad parameters for October’s Budget, to be set out in the Summer Economic Statement, due for publication in a couple of weeks.

Ministers are increasingly at odds whether to introduce measures to address the cost of living before the budget.

While Mr Martin, Mr Varadkar, Mr Donohoe and Mr McGrath have appeared to rule out any short term measures, other members of Cabinet said last night such interventions are “entirely possible

At Cabinet today, ministers will approve a plan to allow students to earn up to €6,552 during the summer without impacting on their grant.

Higher Education Minister Simon Harris will seek Government approval to allow students earn more over the summer break and ensure students do not lose eligibility for their grant.

This will allow the holiday earnings income disregard to increase from €4,500 to €6,552.