The Government are to consider a potential €15 hike in pension and welfare payments.
This comes as one of the biggest reductions in income tax in almost a decade is to be introduced in this year's budget.
Finance Minister Paschal Donohoe published the Tax Strategy Group papers on Thursday, which stated plans to be examined by the Government during the last month of budget negotiations.
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The measures are aimed at putting cash back in people's pockets as the cost of living crisis continues.
Among the recommendations is a €15 increase across the board on social welfare payments and introducing a new tax band that could save one million workers up to €1,000 a year.
All of the social welfare packages outlines in the Tax Strategy Group papers include a double-digit increase in weekly payments ranging from €10 to €15.
The first of which recommends a €15 increase across all payments, which would cost the State around €1.1 billion.
This would mean the majority of people receiving social welfare payments would receive €223 per week, while a person on the State pension would see their pay packet increase to €268 per week.
Another option under consideration is a €10 increase in all welfare payments along with a €10 hike in the Fuel Allowance and Living Alone allowance.
A change to the current tax brackets is also on the cards. Over one million taxpayers could pocket an extra €1,000 a year if a decision is made to introduce a third tax band for middle-income earners.
There are currently two rates of tax in Ireland, one at 20 per cent and a higher rate of 40 per cent for earnings over €36,800.
Two options are under consideration, including income tax at 30 per cent for earnings between €36,800-€41,800, which would cost the Exchequer €525 million a year.
This would see individuals and married couples with one earner take home an extra €500 a year.
The second option is to set the 30 per cent tax rate at incomes between €36,800 to €46,800, which would cost €945 million.
Individuals and married one-earner couples would take home an extra €1,000 a year under this band.
Speaking at the launch of a new drone delivery service in Dublin, Tanaiste Leo Varadkar said: "The possibility of a 30 per cent tax rate, a middle tax rate for middle-income people, is under consideration.
"The paper today set out how about one million workers would benefit from that and what the potential cost would be.
"I think the most important thing to emphasise about the budget, which is now only just over a month away, is that it will contain a substantial income tax package that will reduce income tax for low-income workers, middle-income workers and higher-income workers but a particular emphasis on middle-income workers.
"The exact details of how that is achieved has to be worked out between now and budget day, but what is absolutely agreed is the principle that we will see a very substantial income tax reduction package in the budget."
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