A DOUBLE CHILD benefit payment, a tax on e-cigarettes and cost-of-living measures will all form part of this year’s budget, ministers have confirmed today.

However, Social Protection Minister Heather Humphreys indicated this afternoon that there will be no increases to the jobseeker’s allowance in the upcoming budget.

Speaking to reporters, Humphreys said she wants vulnerable groups to be a priority, adding that a €20 increase for all social welfare payments would cost €1.5 billion.

Tax on e-cigarettes

Meanwhile, at Government Buildings today, Finance Minister Jack Chambers said a new tax on e-cigarettes is “likely” in October’s budget. 

Former Minister for Finance Michael McGrath announced in last year’s budget that it was the government’s intention to introduce a new “domestic tax” on e-cigarettes.

“It’s our intention to make progress on that in this year’s budget,” said Chambers.

“There’s work ongoing between Revenue and the Department of Finance on how we can operationalise that,” he added, stating that his department is considering a range of options. 

Chambers said he wants to “follow through” on McGrath’s commitment, stating that there are technicalities being worked through on how to make that possible for 2025.

Pensioners

Speaking about calls for the pension to rise by €20 this year, Chambers said there will be a “very substantial package of support for pensioners, and indeed, for those least well off in our society”.

“Because of our sound management to the economy, we can provide for pensioners and other groups who depend on our social protection system,” he said. 

Humphreys said the pensioners, carers and people with disabilities should be prioritised in Budget 2025.

She said the double child benefit payment paid out at Christmas time was “extremely popular” and said there are not many people that do not need that payment as costs such as groceries were still high.

As Ireland was still at full employment, the minister said she does not believe there is a policy rationale for increasing welfare payments to those who are long-term unemployed.

She highlighted a recent change to jobseekers’ benefit that will see people who are let go from their jobs receive a higher rate of payment linked to their pay over a three-month period.

Long-term unemployed

“For those that are long term unemployed, there are many, many opportunities for them to take offers of work,” she said.

“I think it’s important that we support people in the budget that can’t work. So some people with disabilities can’t work. Some of them can, and we’re trying to help them in that area too, but generally speaking, people with severe disabilities cannot work.

“People who are caring, they’re providing a service, and they’re helping somebody to remain in their home, and they often can’t work.

“Pensioners, they have they have done their piece. They have worked hard over their lives, and now they’re retiring.”

Asked about lump sum payments and the cost-of-living, Humphreys said families and others are still under pressure:

“I think it’s important to remember that lump sum payments were introduced at a time when inflation was running at a very high rate and thankfully, inflation has dropped considerably since then.

“However, the cost of going into the supermarket is still expensive, groceries are expensive – there’s no doubt about that – and lump sums have proved very, very popular.

She recalled meeting a pensioner in Connolly Station on Monday morning, who told the minister “the lump sum was great” and told the minister to “keep it going”.

Income tax

In terms of this year’s tax package, the finance minister said today that a core area of focus will be on supporting reductions in income tax and supporting over 2 million people in Ireland’s economy who are working and paying the higher level of income tax.

“We really want to give them a break in 2025,” said Chambers. 

The minister said he “fully understands” that for many families, the cost-of-living is still a central issue, even with inflation coming in at 1.5% in June and July.

“Prices haven’t fallen from many families, whether it’s in groceries, in energy and across different price dynamics of our economy,” he said, stating that cost-of-living measures  “will be a central consideration on how we frame budget 2025″.

A VAT reduction on energy was introduced last year, and the continuance of that is under consideration, particularly during the winter period, said the minister. He said it was  important to continue to support families during that time.

Inheritance tax

In terms of inheritance tax, Chambers said it is a “significant imposition” to many families, particularly as property prices have risen, confirming that it is one aspect of the budget receiving consideration. 

Something the finance minister was clear he was ruling out is the idea of introducing car-parking levies for employees. 

The Department of Finance said that Government should not introduce car-parking levies in its recent tax strategy papers, citing equity and equality considerations, including that the fees may be perceived as an unfair tax on certain workers, including those without access to remote work.

“That’s not something I believe should be commenced in the next 12 months,” said Chambers. 

He said many people are still dependent on their car and are without alternatives.

“I think we need to make sure we drive progress on capital investment and transport infrastructure before we impose additional taxation or levies on people who are driving a vehicle,” he added.