Kieran O'Donnell
Ceist:59. Deputy Kieran O'Donnell asked the Minister for Social Protection if consideration is being given to index linking social welfare payments which would help mitigate the impact of inflation. [14864/22]
Amharc ar fhreagraTuesday, 22 March 2022
Ceisteanna (59)
Freagraí scríofa
A number of studies in recent years have considered the indexation of various categories of social protection payments.
Following publication of the Roadmap for Pensions Reform in 2018, which included a recommendation to benchmark and index State Pension rates, my Department undertook a consultation process in 2019 with interested stakeholders to hear views on possible approaches to the indexation of pensions, and social welfare rates more generally. This process also included discussion with representatives of the community and voluntary sector at the Pre-Budget Forum in July 2019, as well as at bilateral meetings with stakeholders.
The outcome of these discussions was considered, and in consultation with the Department of Public Expenditure and Reform, the Department has developed proposals for setting a formal benchmark for State Pension Contributory payments and the indexation of future changes in pension rates of payment.
The approach developed, known as the “smoothed earnings” approach, aims to ensure that the relative value of welfare payments compared to market earnings would be maintained over time and that, in the short-term, the real value, or purchasing power, of these payments would be protected.
This commitment was reiterated in the Roadmap for Social Inclusion which also outlined a potential approach for benchmarking and indexing pension rates.
Finally, the Pensions Commission report also examined the issue of benchmarking pension rates and has endorsed implementation of the “smoothed earnings” approach.
The recommendations of the Pensions Commission are being considered. I intend to bring proposals to Government in April in relation to these recommendations.
I am acutely aware of the increase in consumer prices in recent months, especially the increase in fuel and other energy prices. To help mitigate the effects of these rising costs, the Government announced a package of measures in February, costing in excess of a half a billion Euro.
These measures include an additional lump sum payment of €125 which was paid last week to households in receipt of the Fuel Allowance payment. This lump sum payment is intended to target the most vulnerable social welfare recipients to protect against rising fuel costs.
This payment, in addition to the Budget increase to the Fuel Allowance, will mean low-income households see an increase of 41% in their fuel allowance payments this season compared to the last season.
A further measure to help with energy costs is an Energy Credit of €200 to be applied to electricity accounts for all households.
The increase of €10 to the weekly income threshold of the Working Family Payment will be brought forward, now taking effect from early April 2022 rather that than from June. For those in receipt of more than a minimum payment on the Working Family Payment, the €10 increase in all earnings thresholds will result in an increased payment of €6 per week.
These measures are in addition to those introduced as part of Budget 2022, which provided for the largest social welfare Budget package in 14 years. In January, around 1.4 million people received a €5 increase in weekly payments, and more if they have dependents.
There were also a number of targeted measures designed to support those most vulnerable to poverty, including increases in the rates of qualified child payments and the Living Alone Allowance.