The Government is expected to announce a spring cost-of-living package later this month. It is expected to be more modest than the package announced in the Budget.
In addition, some (but not all) of the temporary measures announced in October look set to be discontinued from the end of February.
The leaders of the three Coalition parties, Taoiseach Leo Varadkar, Tánaiste Micheál Martin and Eamon Ryan, the Minister for Transport and for the Environment, are due to meet finance ministers Michael McGrath and Paschal Donohoe on Thursday to thrash out the future of the schemes, with the result brought to Cabinet next Tuesday.
Here’s what we know so far:
Continuation of excise cuts on motor fuels
These cuts, which reduced the price of petrol and diesel, were introduced in March 2022, initially for six months. They were extended in the Budget in October but are due to be ended on February 28th. The cuts in excise mean that a litre of petrol is 21c cheaper; a litre of diesel is 16c cheaper; and green diesel is 5c cheaper.
Fine Gael and Fianna Fáil both want the cuts extended, but this has been opposed by the Green Party because it does nothing to incentive modal shifts away from cars. The Taoiseach, Mr Varadkar, has argued that if the incentive is discontinued, prices at the pump will creep up quickly to the €2 mark again. Likelihood: Looks like the views of the two bigger parties will prevail.
Once-off electricity credit of €200
The Government announced universal energy credits amounting to €600 per household at Budget time. The last €200 tranche of this is due to be transferred as credits in utility bills in March. However, after a cold January, households received very high bills in the past ten days.
Again the Government is divided on this additional €200 payment across predicted lines. Fine Gael and Fianna Fáil are in favour, while the Greens have expressed some doubts. Likelihood: Also likely.
Double Welfare Payments
This was another key measure in last October’s package. On October 17th, households were paid a double welfare payment. This once-off measure might be introduced in the Spring package. Likelihood: 50:50.
Double Child Benefit Payment
Another universal measure favoured by the bigger parties. There was a double Child Benefit Payment on November 1st and it’s been talked up by two of the parties in Government as a possibility in the Spring. Likelihood: 50:50.
Retention of reduced 9 per cent rate for hospitality
This is a contentious issue and has been the subject of much lobbying. Senior officials in the Department of Finance have recommended the rate be restored to its previous 13.5 per cent level after February 28th. The reduction was introduced during Covid but has also become part of the cost-of-living policy architecture.
Green Party Deputy Leader Catherine Martin has argued for its retention, and hospitality and hotel groups have met Minister for Finance Michael McGrath on the issue. However, hotels have been doing very well in the past year, especially in the larger centres, while the other beneficiaries (including restaurants and pubs) have had more mixed fortunes.
This will be a crucial political decision for the Government. Retaining it will cost €400 million per annum.
Likelihood: Less than 50:50.
Reintroduction of mortgage interest relief
The interest rates have been climbing relentlessly in recent months and the once-attractive tracker mortgage variable rate no longer has as glossy a look. Sinn Fein’s finance spokesman Pearse Doherty has demanded the Government introduce a temporary mortgage interest relief scheme to assist people who find themselves facing steeply rising mortgage payments each month. The Government has been cool on the idea so far. Likelihood: Not likely.
Once off-payments for welfare recipients
In October the Government announced once-off payments of €200 for those on living-alone allowances: €400 for those receiving fuel allowance; €500 for those receiving working family payments; as well as €500 for those in receipt of payments for disability; invalidity; blindness, or who are receiving the carer’s support grant. Likelihood: High but perhaps not at the same amount.
Double student grant
Another once-off payment from the autumn that might come into the mix. Likelihood: Unknown.
The reduced fares of 20 per cent on public transport as well as a 50 per cent reduction on young adult leap cards are not due to expire until the end of 2023.
