From Department of Public Expenditure, NDP Delivery and Reform; Department of Finance
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The Minister for Public Expenditure and Reform, Michael McGrath, and the Minister for Finance, Paschal Donohoe, today 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 Ministers were 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:
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.”
The Minister for Finance Paschal Donohoe said:
“The rate of inflation that we have seen in the past few months has exceeded our expectations, mainly because of higher energy prices. While we expect the inflation rate to moderate from the second quarter of this year, it is nonetheless appropriate to respond to the increase in prices and today we are doing this. When taken in conjunction with the measures announced already, the government package amounts to €505 million, a significant change.”
| Measure | Details | 2022 Cost € million | |
| Fuel Allowance lump sum payment | Additional amount of €125 per recipient payable in mid-March | 49 | |
| Energy credit | Increase in Energy credit payment to €200 inclusive of VAT (€176 excl. VAT) | 163 | |
| Previously announced Energy Credit | Previously announced credit of €100 excluding VAT | 215 | |
| Working Family Payment | Increase in weekly income threshold of €10 to apply from 1 April | 4 | |
| Drugs Payment Scheme | The DPS threshold will be further reduced to €80 per month, having been reduced to €100 per month in Budget 2022 | 17 | |
| School Transport | reduced caps for multiple children on school transport fees to €500 per family post primary and €150 for primary school children - for the coming academic year | 3 | |
| Public Transport | A 20% reduction will apply in PSO Public Transport fares until the end of 2022 | 54 | |
| Total | 505 |