Social Welfare Payments

Dáil Éireann Debate, Thursday - 3 February 2022

Thursday, 3 February 2022

Questions (23, 62)

Seán Sherlock

Question:

23. Deputy Sean Sherlock asked the Minister for Social Protection if she will seek an increase in social welfare payments in line with inflation. [5353/22]

Christopher O'Sullivan

Question:

62. Deputy Christopher O'Sullivan asked the Minister for Social Protection her strategy to ensure that social welfare payments keep pace with the cost of living; and if she will make a statement on the matter. [5396/22]

Written answers

Minister for Social Protection

I propose to take Questions Nos. 23 and 62 together.

The social welfare package in Budget 2022 was the highest in 14 years with approximately 1.4 million people receiving a €5 increase in weekly payments. In addition to improvements in core social welfare rates, the Budget package included a number of targeted measures.This focused approach to supporting those in greatest need is guided by evidence-based research produced by organisations such as the ERSI and the Vincentian Partnership for Social Justice. In addition to the increases in core rates of payment, these targeted increases ensure that additional resources are directed to groups most at risk of poverty.

For example, a lone parent with two children under 12 years will see their income increase by €14 per week during the fuel season.In addition, as energy prices were increasing, I ensured the the increase to the fuel allowance rate was implemented from Budget week.In terms of inflation generally, it is recognised that there are three main drivers to the increase in prices that we have been seeing:

- There was a slight decrease in prices over the course of 2020, or deflation. The increase in prices we are seeing since last year is partly as a result of prices recovering from this low base. Higher inflation rates today reflect, in part, the fall in price levels from a year ago.

- There have been global supply chain disruptions. This mismatch between supply and demand puts pressure on prices.

- There has been welcome economic growth in Ireland and elsewhere, but this has had an impact on energy prices. Ireland is not unique in experiencing energy price inflation.

The Central Bank last week noted that higher inflation rates should be viewed in the context of many years of persistently low inflation before the pandemic and the current unusual economic recovery from the pandemic-induced recession. It currently expects prices to stabilise later this year.

I am very conscious of the need to monitor this situation carefully, particularly its impact on those most vulnerable, and I will continue to do so.