Government has provided a significant amount of support to households and businesses over the last four years to help absorb the worst impacts of rising prices. The policy response has included energy credits, reduced rates of tax on fuel and electricity, lump sum payments for social welfare recipients as well as mortgage and rent supports for households.
This was in response to the high rates of inflation that began in 2022. Inflation has reduced significantly over the first half of the year, although there has been an uptick in the last three months. I am advised that this, in part, reflects a ‘base effect’, in other words very low figures in the same months last year.
Government has moved away from the temporary ‘once-off’ packages of previous budgets in favour of introducing more targeted and permanent measures. For example, Budget 2026 extended the reduced rate VAT on gas and electricity in recognition of the fact that prices remain elevated.
Budget 2026 provides for €28.9 billion to be spent on social welfare in 2026. The measures contained in the Budget are designed to support the most vulnerable in our society with the increased cost of living and there is a particular focus on tackling child poverty.
The wide array of measures clearly demonstrates the huge focus the Government has placed on assisting vulnerable people and families.