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INCREASES TO WELFARE payments and tax bands will on average compensate households for forecast price growth, according to research.
However, below-inflation increases to the Working Family Payment and state pension mean that some low-income working parents and retired couples, who do not receive the fuel allowance, will see their disposable incomes eroded by rising prices, it found.
The research into Tuesday’s budget was published by the Economic and Social Research Institute (ESRI).
It also found that although increases to the carbon tax and tobacco duty disproportionately affect lower income households, they also gain from above-inflation increases to core social welfare payments and supplements for those living alone or with dependants.
The ESRI said these increases are “sufficiently large” to offset the impact of increases to indirect taxes for the lowest-income fifth of households.
It will also leave poverty slightly lower had all welfare payments and tax bands kept pace with inflation, it found.
Karina Doorley, a senior research officer at the ESRI, said: “The changes announced in Budget 2022 will on average compensate households for forecast price growth and leave poverty slightly lower than would an inflation-proofed budget.
“However, some low-income working parents and retired couples will see real cuts to their payments, as may others if price rises turn out to be larger than forecast.”
Barra Roantree, an ESRI research officer, said: “Budget 2022 announced some well-targeted reforms with clear policy objectives, such as the above-inflation increases in welfare supplements for those with dependants and those living alone, which will slightly reduce poverty.
“However, it’s not clear why the arguments for increasing income tax bands and credit do not apply equally to PRSI and USC bands or to core welfare payments, some of which rose above and others below the forecast rate of inflation.”
Kieran McQuinn, a research professor, said: “From a macroeconomic perspective, Budget 2022 sees further increases in both current and capital expenditure.
“The expected increase in capital investment is particularly welcome and reflects a period of dis-investment after the economy recovered from the great financial crisis.
“Over the coming years, fiscal policy will have to be restrained in terms of current expenditure to ensure that the increase in capital investment does not cause the economy to overheat, particularly as the economy is expected to grow robustly.”
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My own electricity bill has risen from€90 to €130 per month. Also, it looks like I’ll finally have to move on from putting €30 a week into the car and increase it to €40. Straight away that’s me down €80 a month, just on those two things. That’s without mentioning the increase in cost of coal, heating oil and a million other day to day things. Not good. About the only thing not going up are my wages!
@Football in the Groin:
Skyrocketed isn’t even the word for inflation ever since FG came to power.
1 bed apartment I moved into was 450 euro over a decade ago, it went up to 750 in three years, I saw it last year for €1550.
They don’t build. Creating scarcity. Yet overspend in unnecessary areas.
What about tax poverty i.e. workers being taxed into effective poverty by taxation
@Damon16: You will be told by the main party bots to emigrate if you don’t like it.
Food and fuel poverty is a real thing in today’s society.the government don’t care about low income citizens anymore yet they are the ones most likely to be hit hardest.what a disgrace
@James: The hungry and cold citizens are armed with votes though.
@David Corrigan: A lot of people voted Sinn Fein yet same 2 parties are in Government so much for voting making a difference. As someone once said “if your vote made a difference they wouldn’t let you vote”
@Patrick Barrett: This is a dangerous line of thinking which the political establishment have worked very hard to trick you and millions of other people into, in order to convince you not to take part in bringing them down. Don’t fall for it. In the last election, the rise of the left forced FF and FG, two neoliberal parties who had successfully operated an entirely phoney revolving door “dichotomy” for most of the previous century, to finally admit that there’s little practical difference between the two and that they can, contrary to years and years of supposed rivalry, work together in a coalition.
The seismicity of this development cannot be overstated. For so many years they operated a two party system under the totally false pretence of being real alternatives to eachother. They can no longer do this. They will not be able to run their usual “it’s all the other party’s fault” campaign during the next election – to quote a classic political comedy, “they must all hang together, because if they don’t, they’ll all be hanged separately”.
Progress is undoubtedly slow. Frustratingly, infuriatingly, painfully slow. But the last election was the beginning of the end for civil war politics, in which Ireland’s choice was between “Conservative” and “Conservative, but my great-grandad fought against your great-grandad a hundred years ago”. We now have a meaningful left/right divide in our politics, and this will have a gigantic impact on policy going forward – whatever happens.
What about the person living on there own on the minimum wage paying for everything. We have nothing left after paying our bills
How much of an increase will the politicians receive in 2022?.
@Paul Power: They gave themselves 3 in the past 18 months, I’m guessing another two at least. They are already better paid than the leaders of pretty much any other country which is crazy when you consider how small our country is and the number of people each govern.
Your absolutely running to stand still in this country now. College fees, accommodation cost negligible tax relief on many big expenses like this. All the time prices are going up now and wage increases are only playing catch up
It’s way past time we tackled our tax upon a tax rip off. Increasing carbon tax hurts a bit but VAT on electricty(13.5%) also increases. It’s not sustainable and should be illegal.
Businesses are vat exempt bringing goods into Ireland. These products are then sold onto Irish consumers with a staggering 23% vat added after that business includes its own costs and profits. It’s no wonder consumers are buying direct from companies in Germany(19% vat) instead of buying from Irish outlets.
We did we stop being a social welfare state and became a Business welfare state?
So I had a look at my 8th August to 9th September electricity bill.
Usage of electricity amounted to €127.53.
Total electricity bill was €163.63 as it included –
Standing charge: ( a charge for the fixed cost associated with providing electricity supply) €16.50,
PSO Levy: ( a charge for security of supply and the generation of electricity) €6.52 and
VAT: (government tax) was €19.46.
Allowances of €3.83 for paperless billing and €2.55 for level pay were made.
Overall levies on the monthly bill of €127.53 amounted to €42.48 or 33.31% over the cost of electricity actually used.
Actual amount paid allowing for allowances of €6.38 was €163.63.
The government in their wisdom? have now decided to increase the amount of levies we pay on our electricity bills and no doubt gas, oil etc. also to satisfy the green cohort in their ranks.
As a pensioner who due to underhand tactics on the government’s part (averaging rule) is not receiving a full pension I will now receive a proportion of the €5 increase they awarded with great fanfare – to help meet their recent increase in their mythical carbon tax.
To misquote Shakespeare there is something rotten in the state of Ireland.
@Mary Dunphy: scandalous
The golden age of our civilisation is behind us. From now on everything will be more expensive.
Fuel prices increasing, increases everything for obvious reasons.
Repeatable(renewables) electricity will not be cheaper than fossil fuels, as FF are/were so easy to extract amd energy dense. Also when we have to stop using FF completely or run out of them, we ll have to be able to recycle/rebuild the wind/solar equipment using power from wind and solar.
This will limit our ability to grow economic growth. So there should be a planned slow down of economic activity, to allow us to live more sustainably within the means of the biosphere.
@Anarch Eco: You’re not wrong, but the elephant in the room here is human overpopulation. The more of us there are splitting the Earth pie, the less pie there is to go around. This should be common sense. We should be incentivising and encouraging people to not contribute to this, but the current economic model of “endless growth” requires that each generation be bigger than the last. It’s an insane ponzi scheme whose natural conclusion is to screw over whichever generation gets left holding the planetary bag when it bursts from being overstretched.
Why this isn’t talked about more is entirely beyond me. This planet has limited resources, the more people who have to share those resources, the less each individual’s quality of life can be. It should be blindingly obvious that regardless of any other factors, this is a real, serious, existential threat facing our civilisation – we’ve gone from three billion humans in the mid-20th century to almost nine billion now, and look what’s happening to the planet as a result.
It is madness to suggest that growth can continue indefinitely on a planet which has a fixed size and scale. It’s a mathematical impossibility.
@Patrick FitzGerald: you’re not wrong either!
10,000 years ago people were 1% of land mammal biomass
Today Humans plus livesstock are approx 95% mammal biomass.
Crazytown
So I had a look at my 8th August to 9th September electricity bill.
Usage of electricity amounted to €127.53.
Total electricity bill was €163.63 as it included –
Standing charge: ( a charge for the fixed cost associated with providing electricity supply) €16.50,
PSO Levy: ( a charge for security of supply and the generation of electricity) €6.52 and
VAT: (government tax) was €19.46.
Allowances of €3.83 for paperless billing and €2.55 for level pay were made.
Overall levies on the monthly bill of €127.53 amounted to €42.48 or 33.31% over the cost of electricity actually used.
Actual amount paid allowing for allowances of €6.38 was €163.63.
The government in their wisdom? have now decided to increase the amount of levies we pay on our electricity bills and no doubt gas, oil etc. also to satisfy the green cohort in their ranks.
As a pensioner who due to underhand tactics on the government’s part (averaging rule) is not receiving a full pension I will now receive a proportion of the €5 increase they awarded with great fanfare – to help meet their recent increase in their mythical carbon tax.
To misquote Shakespeare there is something rotten in the state of Ireland.
No rich enough to keep up with the gouys?… To the black market with you!!
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