Pensioners to get financial boost in Budget, but it might be once-off: what we know so far

Tánaiste Micheál Martin confirmed there will be pension increases in Budget 2024, while it is also expected the fuel allowance will rise.

However, it is understood this may be achieved through a bonus payment instead of increasing the rate.

Details are yet to be finalised as negotiations continue ahead of the Budget in a month’s time.

But Mr Martin said “pensioners had a challenging time in terms of the cost of living” and deserved help.

“We did, I think, a significant package last year for pensioners with both the cost-of-living package and the Budget, so yes, we will be looking at increasing the pension,” the Fianna Fáil leader said during his visit to the Middle East.

Mr Martin said Finance Minister Michael McGrath is “putting a lot of work” into the Budget and it will “cover a wide range of areas”.

He said the exact increase for pensions has not been finalised.

The current top rate of the state pension is €265.30 a week, while the fuel allowance is €33 a week, which together comes to €298.30.

Government sources said yesterday that retirees who qualify for the fuel allowance will receive payments “well over” €300 a week.

In last year’s Budget, the weekly state pension was increased by €12 while the means-tested income limits for the fuel allowance were expanded to allow more people to claim the benefit.

Michael McGrath remains coy on Budget as Fianna Fail looks to put stamp on it

There have been demands from some charities for welfare rates to be increased by €25.

Budget talks will intensify in the coming weeks as ministers return from the summer recess to make their case for extra funding.

However, the Department of Public Expenditure and Reform has already slapped down certain departments for being “too ambitious” in their budgetary asks.

Government sources said ministers have already received “good strong warnings” from Paschal Donohoe’s department about their demands.

The Irish Fiscal Advisory Council warned ministers this week not to “repeat past mistakes” and said there was “no justification” for once-off cost-of-living payments.

Ministers have also taken note of cuts to electricity prices that were announced this week and suggest this points to the worst of the cost-of-living crisis being over.

Last year, the pension was increased by €12 a week as part of the “biggest social protection budget in the history of the State”, which supported pensioners, working families carers and people with disabilities.

It is understood Social Protection Minister Heather Humphreys will be “ambitious” in her asks again this year.

The Working Family Payment and the increase for qualified child welfare payments are also expected to increase after Children’s Minister Roderic O’Gorman said this week they are effective at reducing poverty.

While the Economic and Social Research Institute’s (ESRI) proposed second tier of Child Benefit might be considered, it is unlikely the €700m-a-year measure will be included in Budget 2024.

Speaking in Cork, Taoiseach Leo Varadkar said the parameters for the Budget have been set, with an overall spending increase of about 6.2pc.

“There will be a tax package, aimed particularly to help middle-income families and to make sure that more and more people don’t fall into that top tax net,” he said.

“But we also intend not to spend all of the surplus, because we know that much of those tax receipts may just be transitory.

“The responsible thing to do is to use a good amount of that surplus both to pay down debt and to set money aside for future pension liabilities and future infrastructure costs.”