Welfare and pension increases to be announced in budget

Carer’s allowance and disability payments to increase and price of tobacco to rise by 30%

An increase in a number of pension and welfare payments will be announced in Tuesday’s budget. Minister for Social Protection Leo Varadkar will later give details of the package, including an additional €5 in the pension.

It is understood agreement has been reached between Fianna Fáil and Fine Gael to introduce the pension increases from March.

Discussions were under way last night about the size and timing of increases to the carer’s allowance, disability payments and pensions for blind people and widows under the age of 66.

It has also been confirmed that the price of tobacco will increase in the budget, with a packet of 20 cigarettes going up by 50 cent. The Independent Alliance secured a reduction in prescription charges for the over-70s after a last-minute request ahead of the budget.


The alliance, which has five TDs, made a final plea for the measure during talks with Minister for Public Expenditure and Reform Paschal Donohoe and Taoiseach Enda Kenny.

Mental health

The group had requested a reduction in the charges from €2.50 to €2 for people over 70. Mr Donohoe agreed to cap the monthly cost for the over-70s at €20, a reduction of €5.

The move had been resisted by Fine Gael who insisted money for the health budget had already been allocated to a series of measures, including €35 million for mental health and €50 million for the disability budget.

But Minister for Transport Shane Ross said the alliance found the prescription charge “very difficult to accept in its current form”. He said he and his colleagues would be seeking a “substantial reduction” in the charges.

The Independent Alliance TDs also sought a 10 per cent increase in the Christmas bonus paid to welfare recipients and pensioners.

Mr Varadkar has agreed to an 85 per cent restoration of the payment, which equates to €159.80 for people on welfare and €196 for pensioners.


He will increase the one-parent family payment and the back-to-education allowance by €5 per week. The Minister will also outline a new “cost of education” allowance which will be made available to claimants of the back-to-education allowance with children. It will be €500 a year. The income disregards for the one-parent family payment and jobseeker’s transition payment will rise by €20, from €90 to €110 per week, reversing previous reductions.

Minister for Health Simon Harris has been allocated a budget of more than €14 billion, while Minister of State Helen McEntee will be allocated €35 million for mental health services. This will include one major capital project, which is understood to be the reconstruction of an old hospital.

The National Treatment Purchase Fund will also receive an additional €20 million.

Minister for Housing Simon Coveney will detail a 64 per cent increase in the budget for Traveller-specific accommodation – to €9 million in 2017. This is separate from the general social housing budget.

The threshold for rent-a-room tax relief is expected to increase by €2,000. It is also understand that Dirt will be cut by 2 per cent.