Thousands of parents could receive a once-off double child benefit payment of €280 in the coming months, as the Government considers including the payment as part of a cost-of-living package to be announced on Budget day.
The move would be a huge boost to parents, who would be in line for a €280 one-off payment if they have one child or €560 if they have two. Meanwhile, a family with three children is eligible to receive €840 if the Government agrees to the policy.
A family with twins would also get €840 as they receive one-and-a-half times the normal rate per child. Under plans being considered by Finance Minister Paschal Donohoe, Public Expenditure Minister Michael McGrath and Social Protection Minister Heather Humphreys, the once-off payment would be made before Christmas.
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Other plans also being discussed by Minister Donohoe and Minister McGrath include a double payment of all welfare rates in the coming weeks along with a re-introduction of the €200 electricity credit. A bonus payment of the child benefit is seen as a universal measure as it would assist all families struggling with the cost of childcare on top of other necessary expenditures that have rocketed due to record levels of inflation.
There has been no increase in child benefit since 2016 when it was increased by €5 to €140 by the Fine Gael and Labour government ahead of the general election. The package will be announced as part of Budget 2023 on September 27, with the agreed spending policies expected to come into effect before the end of the year.
Meanwhile, changes to the current tax brackets could also come into effect in next month's Budget. Over one million taxpayers could have an extra €1,000 in their pocket next year if the Government decide to introduce a third tax band for middle-income earners.
Currently, there are two rates of tax in Ireland, one at 20 per cent and a higher rate of 40 per cent for earnings over €36,800. Two options are under consideration, including income tax at 30 per cent for earnings between €36,800-€41,800, which would cost the Exchequer €525 million a year.
This would see individuals and married couples with one earner take home an extra €500 a year. The second option is to set the 30 per cent tax rate at incomes between €36,800 to €46,800, which would cost €945 million.
Individuals and married one-earner couples would take home an extra €1,000 a year under this band. Minister for Finance Paschal Donohoe confirmed: "We want them (workers) to keep as much as they’re earning."
Speaking at the launch of a new drone delivery service in Dublin, Tanaiste Leo Varadkar said: "The possibility of a 30 per cent tax rate, a middle tax rate for middle-income people, is under consideration. The paper today set out how about one million workers would benefit from that and what the potential cost would be.
"I think the most important thing to emphasise about the budget, which is now only just over a month away, is that it will contain a substantial income tax package that will reduce income tax for low-income workers, middle-income workers and higher-income workers but a particular emphasis on middle-income workers.
"The exact details of how that is achieved has to be worked out between now and budget day, but what is absolutely agreed is the principle that we will see a very substantial income tax reduction package in the budget."
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