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€2 billion package

Budget 2025: €420 'baby boost' for new parents among one-off payments in cost of living package

Some once-off payments will likely be issued before Christmas.

LAST UPDATE | 30 Sep

THE BUDGET IS set to include a €2 billion cost of living package and a number of once-off payments, The Journal understands. 

Coalition leaders and senior ministers have wrapped up budget negotiations ahead of the announcement tomorrow at 1pm.

Taoiseach Simon Harris took to Instagram to say Government leaders and the money ministers have “just finished” budget negotiations at 10.20pm this evening. “It is 23 minutes past 10 and the budget is now ready to go to Cabinet tomorrow,” he said.

“I think it’s a really good package. I think what we’ve tried to do here is get the balance right,” he said.

He added that the first element of the budget is to assist the public with the cost of living while the second element of the budget is to plan for next year’s investment in education, healthcare, childcare and housing.

Once-off social welfare payments will likely be issued before and after Christmas, which will include two double child benefit payments before Christmas along with extra payments on fuel and living alone allowances.

It is understood that the ‘Baby Boost’ payment, which grants a triple child benefit payment to new parents, has been agreed and will be announced tomorrow.

From next year, new parents will receive a one-off €420 payment as well as increases to maternity and paternity leave benefits.

Here’s what we know so far:

Cost-of-living measures

  • Two €125 energy credits will also form part of the package, to be taken of bills later this year
  • Double child benefit payment
  • The ‘Baby Boost’ payment has also been secured for new parents. This will give a one-off triple payment to new parents, totalling  €420 for supplies
  • Double fuel allowance payment

Tax measures

  • A reduction in the 4% rate of USC to 3%
  • €2,000 increase in the threshold for the higher rate of income tax, bringing it to €44,000
  • Rent tax credit to increase to €1,000
  • Inheritance tax threshold to increase from €335,000 to €400,000 for children, with further changes for other siblings and relatives.
  • Stamp duty on bulk buying of homes is to increase from 10% to 15% 
  • A hike on the price of cigarettes is expected

Social welfare

  • €12 per week social welfare payment increases, such as the State Pension and Jobseekers
  • €15 increases in weekly payments for maternity and paternity benefits
  • Expansion of the Fuel Allowance for People Over 66
  • Increase in the Carer’s Support Grant to €2,000
  • €200 Living Alone lump sum

Health

  • Expansion of the eligibility criteria for the free IVF scheme
  • Free HRT for women
  • Health Minister Stephen Donnelly is expected to announce that €30 million funding for new medicines will be included in Budget 2025.
  • A €35 million package will also be announced for women’s healthcare

Other measures

  • Free public transport to be extended to all children under the age of nine
  • Free school books to be extended to Leaving Cert
  • Help-to-Buy scheme to be extended to 2029 
  • A basic income for artists will be provided from August next year, it is understood. The €325 weekly payment will be available to 2,000 artists
  • It is further understood that €140 million will be allocated to the Arts Council to target young people and children in the arts
  • Double the number refuge spaces for victims of gender-based crime
  • Funding for schools to buy digital pouches to lock away mobile phones of students during class time
  • On tourism, it is understood that €8 million in funding will be given to Culture Ireland, €61 million will be granted for marketing and €36 million of capital funding will be allocated to Fáilte Ireland
  • Funding for 800-1,000 more gardaí, with training allowance increased to €354
  • 1,100 additional prison spaces will be added over the next five years, with funding for 350 more staff members. A review of the Thornton Hall site in Dublin is also underway where the largest prison in Ireland could be built
  • 8% increases to criminal legal aid fees
  • It is understood that funding for an additional 1,500 SNAs and 350-400 special education classes will be made available. The additional classes will represent approximately 2,400 more spaces in special education
  • A total of €230 million will be allocated to fund sports in Ireland next year, it is also understood. This includes a 10% increase to Sport Ireland after the successful Olympics
  • Funding for an additional 400 staff will be allocated to the International Protection Office and investments will be made to digitise the current systems. This will enable the IPO to process over 11,000 protection more applications next year

‘Spinning’ taking place says Tánaiste

There has been much talk at the weekend about a sticking point over the level of social welfare increases.  

The Taoiseach agreed with Social Protection Minister Heather Humphreys yesterday that the jobseekers’ allowance should not increase at the same rate as other social welfare payments, saying it is a “practical” matter rather than an “ideological debate”.

“These are many good ideas, how do we best make the carpet fit the room,” Harris tod reporters yesterday. 

He agreed with his Fine Gael colleague that the allowance should not be prioritised over payments to carers, pensioners and people with disabilities given that the economy is operating at near full employment.

However it is understood that a €12 increase will now be rolled out to all social welfare payments, including jobseekers after the Greens and Fianna Fáil said leaving out one cohort of people would not be acceptable to them. 

Tánaiste Micheál Martin said today that the budget is now “largely complete” but added there will be a meeting this evening to finalise it.

Martin said he is “bemused” by the reports of back and forths between coalition parties, stating that there was never a €15 increase put on the table for discussion at any meeting he has attended. 

He said there was “spinning”, “mischief” and a “phoney war” going on, stating that it has been “overplayed” and is “much to do about nothing”.

“There’s a bit of spinning going on here that has no substance, really. Because for the last four years in government, this never arose. There was never an issue made about this by any party government. It was always agreed that the same level would apply… maybe it’s the cycle we’re in,” he added. 

Martin said inflation has come down but prices have remained at an elevated level, he said. 

There continue to be sticking points, with ongoing discussions on the VAT rate for the hospitality sector.

Government sources state that this spend was not accounted for in the Summer Economic Statement, however with bumper surpluses, the money might be found. 

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