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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure IE-2022-7/2409 – measures in Ireland

Government launches €505 million cost of living package

Country Ireland , applies nationwide
Time period Temporary, 10 February 2022 – 31 December 2022
Context COVID-19, War in Ukraine
Type Other initiatives or policies
Category Responses to inflation
– Support for other basic items (e.g., food, housing, public transport, medicines)
Author Roisin Farelly (IRN Publishing) and Eurofound
Measure added 23 May 2022 (updated 09 November 2022)

Background information

In February 2022, the Government announced a number of measures designed to support households against a background of rising cost of living.

The measures were introduced due to the increase in consumer prices, particularly fuel and other energy prices. According to Government, the measures strike a balance between targeting “the main underlying problem – higher energy prices – while operating with the fiscal framework set out in the Summer Economic Statement”.

Content of measure

The measures include:

  • temporary 20% reduction in public transport fares from April to December 2022.
  • additional lump sum payment of €125 on the fuel allowance. The Fuel Allowance is a payment to help with the cost of heating your home during the winter months. To be eligible you must be getting a long-term social welfare payment.
  • reduction of the Drug Payment Scheme from €144 to €80. This is a scheme whereby an individual / family only have to pay a certain maximum amount each month for approved prescribed drugs and medicines, and certain appliances.
  • the working family payment budget increase announced on Budget Day will be brought forward from to 1 April. Working Family Payment is a weekly tax-free payment for employees with children. It supports people who are on low pay.
  • reduced caps for multiple children on school transport fees to €500 per family post primary and €150 for primary school children.

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.”

Use of measure

The Government states in its press statement that:

  • The energy credit is estimated to impact over 2 million households.
  • The additional fuel allowance will be paid to 390,000 recipients.
  • The reduction in public transport fares will impact approximately 800,000 daily users.
  • The reduction of the Drug Payment Scheme will benefit just over 70,000 families.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Unknown

Involvement

No involvement.

Views and reactions

ICTU General Secretary Patricia King has said the Government must play their part in protecting the living standards of both employers and workers.

In March, employer group Ibec called on Government to deliver further measures to protect the economy from exceptional energy cost inflation and enhance Ireland’s enhance energy security.

Sources

  • 10 February 2022: Ministers McGrath and Donohoe announce €505 million package in measures to mitigate the cost of living (www.gov.ie)
  • 10 February 2022: Govt agrees €200 energy rebate, 20% transport fare cut (www.rte.ie)
  • 11 February 2022: Taoiseach rules out extra cost of living measures as unions call for 5.5% pay rises (www.irishexaminer.com)

Citation

Eurofound (2022), Government launches €505 million cost of living package, measure IE-2022-7/2409 (measures in Ireland), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/IE-2022-7_2409.html

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