Parents, pensioners and social welfare recipients are the big winners in Ireland’s new cost of living package unveiled by the Government this afternoon.
The total value of the latest cash giveaway is €1.3billion and Taoiseach Leo Varadkar said that this will be the “last intervention this side of the Budget” in October.
Social welfare giveaways account for €470million of the total with tax measures, including the extension of the hospitality special 9% VAT rate, making up the rest.
READ MORE: Parents and pensioners the big winners as Government announces cost of living payments package
There will be a €200 bonus welfare payment doled out to all those in receipt of long-term benefits in April, including pensioners, carers, disabled and lone parents.
All parents will receive a €100 bump for every child in the form of a childrens’ allowance bonus, along with another €100 as part of the back to school clothing and footwear allowance scheme.
And there will be a further saving with the news that the fees for Leaving cert and Junior Cert exams, €116 and €109, have been waived again this year. These payments will kick-in in June.
Motorists have escaped the taxman for now, but there will be a phased clawback of the excise duties discounts introduced last October from June, with the total 15c for petrol and 20c for diesel reductions gone by October.
However, on the downside, the series of €200 energy credits for all households in the country will end next month, but may be reconsidered next winter.
In a statement, a spokesperson for the Government issued 12 key points from today’s announcement.
A €470 million package of measures to help social protection recipients from April to July, for: families with children, lone parents, low-income families, carers, those on disability payments, older persons living alone and pensioner.
The measures include a lump sum child benefit payment of €100 per child to be paid in June, and a €200 lump sum to be paid in April to all long-term social welfare recipients.
In July there will be a one-off increase of €100 in the Back to School Clothing and Footwear allowance, and the State Examination fees for students sitting the Junior and Leaving certificate this year will be waived.
The Hot School Meals programme will be extended to all DEIS primary schools from September, benefiting 64,500 children.
Start preparations for the Hot School Meals programme to be extended to non-DEIS primary schools.
Reduced charges will apply to school transport of €50 per pupil at primary level, €75 per pupil at post-primary level, with a cap per family of €125.
The temporary reductions in VAT on gas and electricity, from 13.5% to 9%, will be extended to 31 October 2023 at an estimated cost of €115 million.
The temporary reduction in VAT on Tourism and Hospitality, from 13.5% to 9%, will be extended to 31 August 2023 at an estimated cost of €300 million.
A phased restoration of the rates of excise on petrol, diesel and marked gas oil will take place in three stages over the coming eight months. This will see rates restored on 1 June by 6 cent per litre of petrol, 5 cent per litre of diesel and 1 cent per litre of marked gas oil. On 1 September these rates will increase by a further 7 cent for petrol, 5 cent diesel, 1 cent for marked gas.
Rates will then be fully restored on 31 October with a final increase of 8 cent for petrol, 6 cent for diesel, and 3 cent for market gas oil. The extension, and phased reintroduction, of these excise reductions is estimated to cost €383 million.
The Temporary Business Energy Support Scheme will be extended, to 31 May 2023, and enhanced, including by reducing the threshold for qualification from a 50% increase in electricity or gas costs to 30% increase (to apply retrospectively from 1 September last year), and by increasing from 1 March the level of relief from 40% to 50% of eligible costs, subject to a monthly limit, which will also be increased from March, to €15,000 per month per trade or profession, subject to an overall cap of €45,000 where the business is carried on from more than one location. These changes are subject to state aid approval from the European Commission. The cost of the extend scheme will be met from the allocation provided in Budget 2023.
There will also be a new grant for businesses using LPG or kerosene.
Commenting on the new measures, Taoiseach Leo Varadkar said: “As everyone knows, we’re experiencing a major cost of living crisis, both in Ireland and globally.
“A lot of people are struggling to make ends meet and businesses are grappling with rising costs. Because of the strength of our economy and the health of our public finances, the Government has been able to respond dynamically to help people, families, businesses and farmers to manage rising costs over the last year.”
He added: “Today, the Government agreed a further intervention aimed at helping families and businesses to get through the Spring and Summer. It is more targeted than previously, but there are universal measures as well.”
Tanaiste Micheal Martin claimed that the Government’s emergency approach to Covid had served the Government well in tackling the cost of living crisis too.
He said: “Time and time again as three leaders and as a government I think we have demonstrated time and time again that in the face of extraordinary difficulties and challenges we will make significant interventions to protect our citizens, our society and our economy.
“This approach got us through Covid and ensured a strong economic recovery when we emerged from restrictions. It informed our response to the unprecedented cost of living crisis.”
Finance Minister Michael McGrath said that it was not possible to help everybody in this package.
He said: “It is a matter of judgement, these are not easy calls to make.
“We recognise that people are under pressure, we have sought to target resources in the best way that we possibly can.
“But we are significantly easing the ending of the various tax measures because we recognise the impact on people’s bills, on the costs at the pumps and forecourts would be really, really onerous if the Government did not step in and provide more money.
“I think it’s really important to underline that point, the Government has to provide more money to extend these measures.”
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