A major spending bonanza is being worked on to help renters, families and workers in the Budget to cope with the cost of living crisis.
Both Taoiseach Micheal Martin and Tanaiste Leo Varadkar have signalled measures which will be introduced to help alleviate pressures on Irish households.
Opposition TDs have slammed the Government for taking the stance that they will not help households again until October.
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One measure expected will see an increase in the bonus a worker can be given tax-free from their employer. The Tanaiste said the increase to the tax-free bonus will go from €500 to €1,000 annually.
And Mr Martin has acknowledged for the first time that renters will be looked after in the Budget.
Mr Varadkar has signalled record spending levels in Budget 2023 which will also include increases in pensions and social welfare.
He said: “An employer in the private sector who is giving a bonus to their staff, only €500 can be tax free, and that is not fair in my view. Paschal [Donohoe] is doing some work on that.
“The good news is, and this probably won’t be a surprise to anyone, is that we have more room to manoeuvre for the budget this autumn than we would have had in any year in recent years.
“That is driven by the fact that tax receipts are very healthy, there are record levels of employment, the fact that incomes are rising, and trade figures are better than ever.
“The public finances are in a good state. But that has to be offset against the fact that the budget is happening in the context of inflation.
“So, pension and welfare increases will have to be bigger than they were in previous years because the cost of living is rising faster than previous years. Because we have made an agreement as a Government to index tax bands and credits, the tax package will be bigger than it was in previous years for that reason.”
Sinn Féin leader Mary Lou McDonald told the Dáil that it is "wrong" and "totally unfair" for the Government to tell people at "breaking point" due to the spike in the cost of living that they must wait six months before they will receive additional assistance.
She said families had been "pushed to the edge now" and the Government needs to "act now" and introduce an emergency budget, adding that people "can't wait until October."
She said that families were facing a "very difficult back-to-school period" and "a brutal winter.”
However, the Taoiseach reiterated that households will have to wait until October’s Budget to get further financial assistance from the Government despite reports that measures would be introduced next month.
But he indicated for the first time that the Government will aim to alleviate pressure on renters in the Budget.
He said: “Work has to commence on the kind of measures both in the budget that would help to alleviate pressures and renters will be considered obviously, along with a whole range of other areas that need to be considered.
“We've already identified a range of areas that are falling under consideration like childcare, for example, housing, which involves rent and other areas and we have to determine what's the optimal way of doing that without adding to inflationary pressures.”
He said measures announced in October would apply this year, before Christmas and that there will be “an immediate application around budget time in respect of some of the measures, but also that will be sustainable over a period of time into 2023 to enable people to get through the winter period where we anticipate that pressures will be fairly significant on families and children.”
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