Dáil Éireann Debate, Thursday - 15 January 2026
34. Deputy Eoin Hayes asked the Minister for Social Protection to provide any analysis on the inflation of costs associated with energy, housing, and groceries for people dependent on social protection supports for the majority of their income; and the way in which that compares with increases in social protection payments over the past five years. [2755/26]
View answerThe CSO produces inflation statistics and this includes an all items category and also the Classification of Individual Consumption by Purpose Adapted to the Needs of Harmonised Indices of Consumer Prices (2000) (COICOP) category.
It is worth noting that indexing weekly social protection rates to only one measure, such as inflation, presents a challenge as it can, depending on what happens in the wider economy, widen the income gap between those largely dependent on social protection payments and other people in society.
The smoothed earnings approach developed in relation to State Pension payments addresses this challenge as it links the pension rate to 34% of average earnings, and allows for variation in periods where inflation exceeds earnings growth. This approach to calculating an indexed rate for State Pension payments has been an input to the annual budget process for the past three Budgets since it was first calculated in September 2023.
Budget 2026, announced in October 2025, provided increases of €10 across social welfare schemes from January 2026, with proportionate increases for those on reduced rates as well as Qualified Adults. This represents a 4.1% increase on most payments when consumer prices had increased by 3.2% over the 12 months to November 2025, according to the latest data from the Central Statistics Office (CSO).
These rate increases will continue to assist in mitigating the impact of the sustained period of price increases for the most vulnerable in our society.
In December 2025, the ESRI published its assessment of the distributional impact of the tax and welfare policies in Budget 2026. Its analysis points out the progressive nature of the social welfare increases in Budget 2026, resulting in real increases in income for those at the lower end of the income distribution.
The ESRI also studied the cumulative impact of Budgets 2020 to 2026 compared to a 2020 policy scenario indexed to price and wage growth and concluded that, thanks the progressive changes delivered across these Budgets, that those in the lowest income decile experienced a real increase in income relative to the alternative (indexed) scenario. This is due, in part, to significant increases in Child Support Payment rates that were in excess of price and wage inflation from 2020 to 2026.
This year, the Department of Social Protection will invest €28.9 billion in social welfare expenditure supporting pensioners, carers, people with disabilities, jobseekers and families in every community across the country.
