The Government is looking at a “hardship fund” and a package of measures to help households that are struggling with the cost of living.
Tanaiste Leo Varadkar has confirmed that each Government Department is now examining how they could give additional financial support to people across the country who have witnessed a rise in food, fuel, energy, rents and almost all household bills.
The Irish Mirror understands that officials in Social Protection Minister Heather Humphreys’ Department are looking at a “hardship fund” which would help low income families.
And a possible extension of the fuel allowance season is also being considered.
The package being considered by the Government could also see a “more generous” energy credit, although it would be costly.
Cabinet has already signed off on an energy credit of €113.50 for every household which will cost €210 million.
It’s understood Tanaiste Leo Varadkar wants to increase the energy credit as it will be easy to do and will benefit all households.
Another measure being considered is increasing the exemption to current bonus rules for workers so that up to €1,000 can be given bonus-free instead of the current amount of €500.
It’s also understood changes to motor tax are also on the table for discussion.
When asked about possible VAT changes, a senior Government source said: “Any sort of tax cut, such as VAT, is inadvisable.
“It’s hard to reverse and when you do, it’s misrepresented as a tax increase.”
A second source said that the Department of Social Protection is examining a “hardship fund” and there are a “good few options” being considered regarding social welfare.
Some Ministers have said the package needs to be delivered quickly out of fear it will be seen as “too little, too late.”
Speaking in the Dail on Thursday, Mr Varadkar said the Government acknowledges that the cost of living is rising and “people are feeling the squeeze.”
He said: “We acknowledge that the actions we have taken are not enough.
“And for that reason, the three party leaders, we met on Monday night and we commissioned line Ministers to develop proposals for a package of measures that will allow us help families with the cost of living.
“It’s being worked on at the moment.
“People are feeling the squeeze, whether it’s the shock of looking at your gas bill or whether it’s the electricity bill or the rise in cost of filling your tank with diesel or petrol, everyone is feeling it in their pocket.”
Government officials were meeting with unions and employers on Thursday and a Cabinet economic sub-committee will be held next Thursday.
Speaking to Sinn Fein’s deputy leader Pearse Doherty, Mr Varadkar added: “When the Budget was prepared back last September and October, the estimates for inflation were somewhere between 2% and 3% and we built the Budget on that basis but that is not the case.
“It turns out that inflation has been much higher, it’s in and around 5% while being a temporary phenomenon..it looks like we may be stuck with high inflation for a longer period than we would have anticipated.
“So when facts change, you need to adjust your policies and that’s what we intend to do.”
