Vol. 1041 No. 5
108. Deputy Joan Collins asked the Minister for Social Protection if she will confirm, in view of a statement made by the Minister for Finance on 22 June 2023 that “there will be a core welfare package to try to improve the incomes of people who are on fixed incomes”, that these increases will be above the rate of inflation and will increase welfare payments in real terms. [32977/23]
On 22 June, the Minister for Finance stated there would be core welfare package increases to improve the amounts given to people on fixed incomes. I am delighted to hear the Minister, Deputy Humphreys, say she will listen to stakeholders. In the most recent budget, social welfare increases for pensioners were below the rate of inflation. Age Action has called this a political choice to cut the living standards of older people. Will the Minister confirm that changes in budget 2024 will increase welfare payments in real terms?
As Minister for Social Protection, I fully recognise the challenges the increased cost of living has brought to many households. Last September, I announced the largest social protection budget in the history of the State, comprising measures worth almost €2.2 billion. The budget was innovative in providing a mixture of eight lump sum payments, delivered in late 2022, and a €12 across-the-board increase in weekly rates, which was the largest such increase since the mid-2000s, along with increases in targeted schemes such as the fuel allowance. Analysis by the Economic and Social Research Institute, ESRI, found that budget 2023 delivered for lower-income households, which were found to be better off than if they had just received an inflation-indexed increase in basic rates. In February, we provided a further €410 million in additional supports to families in need.
In recent weeks, the Vincentian Partnership for Social Justice produced its annual report, funded by my Department, on the minimum essential standard of living. On 19 July, I will meet with that organisation and many other stakeholders, as I have said, at our annual pre-budget forum. This is an opportunity to get their views on what changes should be included in the budget. In recent years, this process of engagement has informed the higher-than-inflation increases in the child dependant allowance, the living alone allowance, the fuel allowance and other payments. Those payments were identified as having the most impact in alleviating poverty. Decisions about budget 2024 will be made in the coming months and, again, I will rely on the inputs from stakeholders to inform the measures I bring forward for the Government's consideration.
I note and welcome the statement by my colleague, the Minister for Finance, along with recent economic analysis from bodies such as the ESRI, which recognises how well the Irish economy is performing, even in the face of challenging headwinds on the international front. Given this strong economic performance and the care the Government has taken in managing its finances, we have the capacity to respond to those headwinds. I assure Deputies that the Government and I will not be found wanting in providing support to those in our society who most need it.
I accept what the Minister is saying. However, we are in an unprecedented, once-off cost-of-living crisis. Inflation is up by 17.2% since January 2021. The consumer price index, CPI, for groceries is up at least 13.1% and may be up by as much as 17%. Electricity prices have risen 112% since 2020. The OECD has pointed to a sharp dip in living standards due to inflation. Fuel poverty is up 40%. Some 671,000 people in Ireland are living in poverty, of whom 188,500 are children. A total of 55,000 older people went into poverty last year.
I make the argument strongly that core payments are crucial. When people are in work, they base their mortgage repayments, electricity bills and everything else on their baseline wages. If they get overtime, it is a big boost. It is the same with social welfare payments. The Minister should listen to the people in the organisations with whom she is meeting. She should match payments to the cost of living. Anything else is a cut.
We must take all the available supports into consideration. I offer an example of a lone parent with a 12-year-old child. Such parents will have received all the electricity credits last year, the lump sums under the fuel allowance of €125 and €100, and €100 for each child under the back-to-school clothing and footwear allowance. In autumn 2022, there was the double weekly payment, the €200 electricity credit, the fuel allowance €400 lump sum, a double monthly payment of child payment, a working family payment €500 lump sum and a 100% Christmas bonus. Moving to spring, people got a €200 electricity credit in March, following the previous payment in January, a €200 lump sum payment to primary recipients of long-term social welfare payments, including working family payment, an additional €100 child benefit payment in June and another €100 payment for each child for whom back-to-school clothing and footwear allowance is paid. When we add all of that up, we get a total of €3,077 per annum, which is a weekly equivalent of €59.17. On top of that, there is the €12 increase in the one-parent family payment, with qualified child payments increasing by €2. The Deputy will accept that we have been trying to support people.
I accept what the Minister is saying. However, we are in an unprecedented, once-off cost-of-living crisis. Inflation is up by 17.2% since January 2021. The consumer price index, CPI, for groceries is up at least 13.1% and may be up by as much as 17%. Electricity prices have risen 112% since 2020. The OECD has pointed to a sharp dip in living standards due to inflation. Fuel poverty is up 40%. Some 671,000 people in Ireland are living in poverty, of whom 188,500 are children. A total of 55,000 older people went into poverty last year.
I make the argument strongly that core payments are crucial. When people are in work, they base their mortgage repayments, electricity bills and everything else on their baseline wages. If they get overtime, it is a big boost. It is the same with social welfare payments. The Minister should listen to the people in the organisations with whom she is meeting. She should match payments to the cost of living. Anything else is a cut.
I accept that core payments are important. I agree with the Deputy on that. I wanted to put money into people's pockets in order that they could pay their bills.
That is why the lump sums were there last year. They are also there this year. That is in addition to the electricity credits. It is about paying the bills. As I have said, if you look at the data over the year, you will see that people were actually better off with the lump sums. They had more money in their pocket with the lump sums. When this is combined with the €12 increase this year and the increase of €5 in 2022, these people were better off. Again, I will be looking at formulating the budget this year. At the end of the day, regardless of the medium, what I want to do is to put money in people's pockets so they can buy the food and essentials they need. That is the most important thing for me.
