Dáil Éireann Debate, Thursday - 24 September 2026
8. Deputy Eoin Hayes asked the Minister for Social Protection the analysis his Department has carried out on the degree to which income disregards and social welfare payment rates have kept pace with inflation and purchasing power measured against equivalent number of hours worked on minimum wage. [67510/26]
Amharc ar fhreagraMy question is about the payments and income disregards, how they are adjusted over time to keep up with inflation and the changes to the national minimum wage. As the Minister might be aware, and I am sure many advocacy organisations have said to it to him as they have said it to me, the changes to the minimum wage have implied a certain number of hours that someone can work that puts them over the income disregard threshold. Therefore, if the minimum wage goes up, as it has in the last while, which is very welcome, some people who might have got a payment are no longer eligible. I would like to hear the Minister's thinking on that.
Changes to social welfare rates cannot be just based on trends in prices or wages but must take account of a wider range of factors, including household composition, patterns in the consumption of households and developments in services, including, for example, the expansion of free GP care, school meals and free school books. Accordingly, changes to social welfare rates, including means tests, are based on a wide range of inputs used by my Department, most notably CSO data, including the survey of income and living conditions, SILC, the labour force survey, the monthly CPI releases and the CSO earnings and hours in employment surveys. We also take account of ESRI research, analysis from the minimum essential standard of living studies of the Vincentian Partnership, which are funded by the Department, as well as extensive engagement with stakeholder and advocacy groups across the year, but particularly at our pre-budget forum and the annual social inclusion forum. The Department also undertakes social impact assessments using the SWITCH model developed by the ESRI, a model whose development and maintenance is also funded by the Department. These inputs provide a broader perspective and a deeper understanding.
Based on these inputs, several changes to income disregards have been implemented in recent years, including, for example, changes to means thresholds for the lone parent and disability payments. In June of this year, the income disregard for carer’s allowance increased by €375 to €1,000 per week for a single person and by €750 to €2,000 per week for a couple. This increase was far in excess of inflation in 2026. With respect to payment rates, the increase in core rates of €10 per week in 2026 represented an increase of between 3.8% and 4.1% for working-age payments, which was also ahead of inflation. Notably, as we discussed earlier, increases of €8 for those under 12 and €16 for those over 12 in the child support payments represented increases of 16% and 26%, respectively.
We have tried to address many datasets in relation to income adequacy and look at the many supports that are available. We are very focused on this. We will not be found wanting in ensuring that families and welfare are protected from the impact of inflationary measures.
I completely understand. The Minister trots out this line that he is keeping up with inflation or surpassing inflation. However, all the research would suggest - this is something put out by the European Union and the OECD - that the lower income populations have a higher rate of inflation because, as a proportion of their income or their costs, they often have to pick more expensive options. Whether it is pay-as-you-go electricity meters, not buying food in bulk or otherwise, a lot of things are really hard for those people. The Government is making an argument in the run-up to this budget that there should be indexation of tax measures. I think that is worth considering, but if that is true, we should also be looking at the indexation of other things. We should be looking at the indexation of income disregards and things like social protection payments. In particular, older people have been calling for a very long time for pensions to be indexed, but it is not something this Government or any previous Government has seriously taken up. I would like the Minister to consider this. If the Government is making an argument about indexation on one side - on tax - should it be making the same argument on social protection?
As I said, we work hard to keep core social welfare rates ahead of inflation. We cannot just identify them in the context of not looking at the other supports that are available. On fuel allowance, we have increased the rate and the eligibility and, this year, we increased the season by an extra four weeks. That is an additional €1,100 of income for those 410,000 people who qualify, and that is on top of their weekly rate. I have referred to a range of other supports across the morning’s session in this regard. We are investing €28.9 billion in our social protection system in 2026. There were increases in all of the core weekly rates, in addition to the support payments that are paid.
This budget will be very much focused on how we can target exactly those people discussed by the Deputy, those who are subject to high inflation in the context of fuel, food, children and supports. However, we cannot just look at the weekly rates. We have to look at the other range of supports that we fund, even within our own Department in the context of school meals. In other Departments, there is the example of the free school books scheme. Where the costs are, we have tried to make interventions to assist people.
There is also the context of housing. We know that poverty is increasing when we take housing into account. I do not lay that at the Minister’s door, and I believe it is a whole-of-government problem. The Minister said that he increased the fuel allowance by four weeks this year, and that was a welcome and needed measure. However, it is important for people to understand that it was actually a restoration. Fuel allowance was for 32 weeks before the austerity era. That is core to this whole problem: we do not look at indexation. The back-of-the-envelope calculations that I have done for social protection payments show they were worth more to people before austerity. We still have not closed the book on austerity, and what those payments would look like.
I absolutely welcome the change to the means test for carers. However, the disability allowance and blind pension have not been changed in several years. The jobseeker’s transition payment takes account of the minimum wage changes, which puts certain lone parents out of qualifying for the payment because of income disregards. The wage subsidy scheme is also not keeping up with the minimum wage in terms of the number of people it can employ. Therefore, there are real issues relating to indexation. I would encourage the Minister to finally close the book on austerity.
Core rates have increased for all payments, including disability allowance. Core rates in budget 2026 increased by 4.1%, and by 4.8% for some payments. Second, in the so-called noughties, what the Deputy calls pre-austerity, there were no hot school meals going to every primary school in the country. A minimum of 500,000 children are now receiving hot school meals every year. That is an investment of nearly €300 million. It is a cost reduction for families that otherwise would be paying for meals. Every family is getting it. That universality is important because in any given school, you do not know what is happening with any given child. That is why we went for the universal model. As for the free school books scheme, ten years ago, families would have paid for everything regarding books and school equipment when going back to school. That is now paid for centrally from the Department of Education. There are the weekly rates, but there are also other interventions that are reducing the burden of cost on families, in particular, low-income families.
