Thousands of workers being paid the minimum wage will see their pay increase by just over 6 per cent on New Year’s Day as the basic rate rises to €13.50 per hour, up from €12.70 previously.
The increase, approved by the Government in the Budget, will be worth €31.20 per week for an adult worker, based on a 39-hour week, with pay increasing from €495.30 to €526.50. This equates to €1,622.40 over the course of the year.
About 165,000 people earn minimum wage in Ireland, a group disproportionately made up of women, younger workers and people with disabilities, many of them employed in the retail, hospitality and services sectors. The rate set, however, impacts on thousands more whose pay is linked, often informally, to the national minimum wage.
Meanwhile, changes to a number of cost-of-living measures announced in Budget 2025 will also come into effect on January 1st.
These include a €12 increase in most weekly social welfare payments, as well as a €15 increase in maternity benefit, paternity benefit, adoptive benefit and parent’s benefit.
The weekly rates of child support payment are due to rise by €8 to €62 for those aged 12 and over, and by €4 to €50 for those under 12, while the income thresholds for the working family payment will increase by €60 a week, regardless of family size.
The carer’s allowance will become a qualifying payment for fuel allowance, subject to meeting all criteria of the scheme, and the carer’s benefit is to be extended to people who are self-employed. The domiciliary care allowance will increase by €20, from €340 to €360 per month.
An energy credit of €125 will be paid to all households from January 1st.
The Irish Congress of Trade Unions (Ictu) welcomed the increase in the minimum wage but said the process of establishing a national living wage in 2026, as committed to by then minister for enterprise and employment, Leo Varadkar, must be completed. The proposed living wage was to be set at 60 per cent of median hourly earnings.
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“Momentum must be maintained by the new government to meet the agreed 60 per cent target in 12 months,” said Ictu general secretary Owen Reidy, “with a view to setting a subsequent target of 66 per cent thereafter – a target reached in the UK last April by a Tory government.
“The National Minimum Wage turns 25 in 2025. Doomsayers predicted when it was first introduced in 2000, and every year the rate goes up, that it will bankrupt businesses and cost jobs. They were wrong then and they are wrong now.”
Mr Reidy was critical of recent Government decisions in relation to a number of employment issues including collective bargaining, the number of statutory sick days and the scrapping of sub-minimum pay rates.
The Low Pay commission recommended the abolition of sub-minimum rates under which workers who are under-18 can be paid €9.45 an hour, 18-year-olds €10.80 and 19-year-olds €12.15, rates based on percentages of the full rate, from January 1st. The move was opposed by some employer groups who argued that the lower rates reflected workers’ lack of skills or experience and was not, in any case, applied in the majority of instances.
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