The Minister for Social Protection has warned there is limited scope for increases in welfare payments in this year’s Budget.

Leo Varadkar said the "fiscal space" available to the Government was tight and priorities in the area of housing and justice could hamper any room for movement.

“There will be negotiations about a budget in September and we all have our priorities in that space, but scope is limited,” Mr Varadkar said.

“The fiscal space is about €1 billion, of which €660 million is for spending,” he added.

“And that has to be shared out among other priority areas, including education, as well as housing, justice and social protection as well.

“So, needless to say, the scope for increases in benefits or new benefits is limited. But I will be doing my best to secure as good a budget as I can.”

The Programme for Partnership agreed between Fine Gael and Independent TDs includes commitments to increase the State pension and the living alone allowance in order to lift them above the rate of inflation.

There are also proposals for a new working family payment to support low-income families.

Lower expectations

Mr Varadkar’s comments will lower expectations that such measures will be announced in October’s Budget.

The Minister was speaking as he announced the roll out of a campaign encouraging fathers to avail of new paternity benefit.

Two weeks of paternity benefit will be available to fathers from September 1st, and the Department of Social Protection will pay €230 a week.

The cost of the introduction is €5 million this year, rising to €20 million in a full year.

Mr Varadkar also denied he was campaigning for the leadership of Fine Gael through a series of high-profile announcements and engagements.

He said there was no vacancy available at present.