Senior sources seek to rein in expectations on cost-of-living measures

Senior Government sources have sought to rein in expectations on the scale of measures to help with the cost of living that will ultimately be delivered.

A series of ideas that could be discussed at a meeting of a Cabinet subcommittee next Thursday which have been floated include increasing the exemption to current bonus rules for workers so that up to €1,000 can be given tax-free, rather than the current amount of €500.

Minister for Social Protection Heather Humphreys is also understood to be examining a dedicated hardship fund which would be used to help out low-income households struggling with heating, fuel and grocery costs.

A longer fuel allowance season may also be considered.

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Ministers may also look at changes and cuts to VAT on energy charges, foodstuffs and road charges.

Tánaiste Leo Varadkar is understood to favour a higher electricity credit above and beyond the €100 credit due to come in around the end of March, and he also spoke of reductions in Government fees and charges during Fine Gael’s parliamentary party meeting on Wednesday.

The waiving of fees for the Leaving Certificate and junior cycle exams for 2022 – as announced by Minister for Education Norma Foley – is an example of this, as well as a proposal to reduce the €3,000 student contribution charge for third-level education due to be considered this month.

Cuts to hospital and prescription fee charges were also said to be “possible”.

One senior source said nothing had been decided and work was ongoing as part of a commitment to help with the cost of living in a way that does not add to inflation.

However, another source said: “Expectations need to be managed.”

Mr Varadkar, speaking in the Dáil on Thursday, said a package of proposals to tackle the rising cost of living was being worked on by the Government, with further discussions with employers and unions taking place.

He was responding to Sinn Féin deputy leader Pearse Doherty, who said inflation had reached its highest level in 20 years.

The Donegal TD also said the Government was “creating soundbites with leaks from parliamentary party meetings” rather than “real and immediate action” and called for an increase in core social welfare rates.

Package of measures

The Tánaiste acknowledged that the cost of living was rising “faster than it has in 20 or 30 years” and actions taken by the Government to date were “not enough”.

“For that reason, the three party leaders met on Monday night, commissioned line Ministers to develop proposals for a package of measures that will allow us to help families with the cost of living,” he said.

“That’s being worked on at the moment, with further discussions on it today, meeting with the unions and employers this afternoon, a chance to discuss it then.

“There will be a committee meeting of the Economic Cabinet Committee, which I chair, next week. It will be another chance to discuss it as well and we will make a decision on it and we’ll make it soon, certainly in the next couple of weeks.”

Mr Varadkar said the Government was aware other governments across the world had taken action and “we believe we must do so as well”.

Mr Varadkar said the difficulty with increasing core social welfare rates was that “a lot of working people aren’t on social welfare”.

“You mightn’t appreciate this but people who are working hard, people who are on middle incomes on paper, even people who may look like they have good incomes on paper also have had to deal with a high cost of living and your proposal would exclude them,” he told Mr Doherty.