State pension and other social welfare rates to rise by €10 in Budget 2026

No increase on excise fuel duty meaning no rise for petrol and diesel prices in this year’s budget

LAST UPDATE | 7 Oct 2025

BUDGET 2026 WILL be unveiled today.

Unlike other years, it’s not being tipped as anything to write home about.

Government has been at pains to emphasise uncertain economic winds that might be coming our way and negotiations went down to the wire last night.

Here’s what we know is set to be announced.

Social welfare payments

There will be a €10 increase across all social welfare payments, including the state pension.
No increase on excise fuel duty meaning no rise for petrol and diesel prices in this year’s budget.
There will be a rise in the carbon tax announced today.

Education

A permanent cut to college fees has been agreed, with the cut of €500. This brings the student contribution fee down from the current €3,000 to €2,500. The measure is effective from 1 January, meaning it is applied to this academic year for students.

Income Tax

Don’t expect much on the tax front in this year’s budget.

Despite there being a cost-of-living crisis, there will be no changes to personal taxes in the Budget, Finance Minister Paschal Donohoe has said.

He broke the news on Friday when he said this year’s tax package was focused on “jobs and investment”.

Health

Health budget to increase by 6.5% or €1.5bn with regional executive officers to allocate funding to hospitals based on demand of service and productivity.
No change to HRT, IVF schemes and no expansion of the free contraception scheme.

Mental Health

An additional 300 staff will be funded for mental health services with a major focus on crisis support and suicide reduction
New specialist nurses to deal with mental health issues in A&E units, and three new Crisis Resolution Teams (including drop-in crisis cafes) are to be established next year

Energy

In terms of energy affordability, the allocation for the Warmer Homes Scheme, which provides fully-funded retrofits to low-income households, is €280 million (for year 2025). That is being tipped as an eleven-fold increase relative to 2020 expenditure.
€558 million for SEAI residential and community energy upgrade schemes, including the Solar PV scheme, to support the delivery of National Retrofit Plan. This is an €89 million increase on last year.
There is an increase in the core allocation for Public Service Obligation (PSO) – which is charged to all electricity customers in Ireland in a bid to support the generation of electricity from sustainable, renewable and indigenous sources.
Investment in public transport services remain the same, now standing at €940 million.

Housing

The government is yet to re-launch its new Housing for All 2.0 plan, but many of the initiatives will be spelled out in the budget.

There will be a cut to VAT for developers who build new apartments.
While the Rent Tax Credit will be retained, it will remain at €1,000 for a single person and €2,000 per couple.
The Help-to-Buy scheme is being retained and will not rise above the current €30,000 cap.
Despite election promises, Taoiseach Micheál Martin told The Journal in New York recently that the First Home Scheme will not be extended to second-hand properties, stating that this year is about focusing on new build homes.

Arts

The basic income pilot scheme for artists will be replaced with a permanent scheme that will be embedded in the department’s budget going forward. Applications for the new, permanent scheme will open in the new year. The permanent scheme will then begin in September 2026.
It is hoped that each year of the permanent scheme we will see additional capacity added to it each year as resources allow.
Application criteria will also be broadened to accommodate more artistic disciplines, with a list being developed in the coming months by the department.
A funding increase of over €10m for sport is on the cards while there will be a €15m boost for An Post. The national broadband plan will receive an additional €33m in funding.

VAT rate for hospitality

No shock here, the VAT rate for the hospitality sector back down to 9% from 13.5%, but it will be pushed out to mid-2026 before it kicks in.

Childcare

No childcare cost reduction to €200 per month this year, with mood music from government last night indicating that the focus will be on core funding and boosting the number of childcare places by 1,000 under the scheme.
Funding will be provided for the building blocks scheme, which will allow existing services to fund extensions onto existing schools or community centres for state-provided childcare facilities.
More funding for youth detention centre Oberstown and large increases in funding for Tusla.

Vaping tax

The government has already confirmed a new tax on vape liquid of 50c per millilitre of e-liquid which will kick in on 1 November.

Tomorrow Minister Chambers and I will present #Budget2026. We believe it is a fair & balanced budget that aims to address the challenges of today while ensuring we have the capacity to invest in our future and what our country needs to keep us moving in the right direction. pic.twitter.com/qUvitXbszZ
— Paschal Donohoe (@Paschald) October 6, 2025

The timetable

Finance Minister Paschal Donohoe will deliver his inaugural Budget speech at 1pm in the Dáil, with Minister for Public Expenditure and Reform Jack Chambers set to outline public spending immediately afterwards at approximately 1.45pm.

The Dáil schedule is then cleared until 8pm to allow opposition TDs to respond to this year’s Budget.

Voting on the Budget will then begin around 8pm and is scheduled to last until after midnight.