Minister McGrath announces €505 million package in measures to mitigate the cost of living;
• Energy credit increased to €200 including VAT
• Fuel allowance lump sum payment of €125
• Drug payment scheme reduction to €80
• Front-loading of the working family payment
• 20% reduction in public transport fees from end of April until the end of the year
• Reduction in caps for school transport fees
The Minister for Public Expenditure and Reform, Michael McGrath T.D., announced a suite of policy measures designed to support households.
The Government is acutely aware of the increase in consumer prices in recent months, especially the increase in fuel and other energy prices. The increase is mainly due to external factors, such as higher oil prices and pandemic-induced supply chain bottlenecks in key regions. The rapid rebound in the domestic economy is also a factor.
In designing a support package, the Minister was conscious of the need to target the main underlying problem – higher energy prices – while operating with the fiscal framework set out in the Summer Economic Statement. The suite of measures announced today strikes the appropriate balance. They come on top of the measures taken in Budget 2022 to support households – such as increases in social welfare rates as well as increases in tax bands. Furthermore, in recognition of the impact of the rising energy costs, the Government agreed to an electricity credit for households late last year. The legislation to provide for this credit is progressing through the Oireachtas and when enacted would allow the credit to be applied to electricity bills in April.
- Today’s new measures include an increase in the energy credit to €200 including VAT, estimated to impact just over 2 million households (to be paid in April).
- A temporary 20% reduction in public transport fares will apply from April until the end of the year.
- A lump sum payment of €125 on the fuel allowance will be paid in early March to 390,000 recipients.
- To reduce the burden on people returning to the workplace and people using public transport, there will be a temporary reduction in fares of 20% from the end of April to the end of the year. This will impact approximately 800,000 daily users.
- The original Sláintecare report proposed a reduction of the Drug Payment Scheme from a €144 to €100, the Government has decided to reduce this further to €80. This will benefit just over 70,000 recipients.
- The working family payment budget increase announced on Budget Day will be brought forward from the first of June to the 1st of April.
- Reduced caps for multiple children on school transport fees to €500 per family post primary and €150 for primary school children.
Commenting on the measures, the Minister for Public Expenditure and Reform Michael McGrath said:
“The additional expenditure measures we are announcing today come to a total of €290 million and will make a positive impact on the incomes of all households in our country.
“The centrepiece is a cut in the electricity bill of every household of €200 including VAT. This will be accompanied by an additional exceptional payment of €125 to households in receipt of the fuel allowance. The fuel allowance payment will be made in March, with the credit of €200 including VAT for electricity being applied to electricity accounts in April.
“A key concern in setting out these measures is to ensure that timely support is provided to all households specifically targeted at energy costs, while using the social welfare system to target additional support to those who are in receipt of the fuel allowance.
“Other key expenditure measures include reductions in fees and charges across a range of government-provided services”.
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