As the clock ticks towards the announcement of the next Budget, the looming spectre of a potential trade war instigated by the US President threatens to complicate matters. Paschal Donohoe, the Finance Minister, has conceded that Ireland could be confronted with a ‘challenge’ due to the potential impact of Donald Trump’s tariffs. Meanwhile, Taoiseach Micheal Martin has confirmed that the changes made in 2025 that resulted in a cost-of-living relief package worth €2.6 billion would not be repeated.
Insight suggests that the Government leaders have consented to forego seemingly divisive one-time payments, including energy credits and double upticks in Child Benefit. However, the question of how those most affected by the escalating cost-of-living crisis will cope in this new landscape remains to be answered. Susanne Rogers of Social Justice Ireland advocates for an increase in social welfare rates failing which the most vulnerable may trail behind.
As the potential of trade war keep occupying conversations, and as opinions sway on Budget 2026, it remains crucial that the most defenseless in society are not overlooked. The onus lies on the government to direct aid towards those who are desperately in need. The rising cost of goods and services in recent years has led to a substantial decrease in the actual value of social welfare payments.
Temporary respite was brought on by previous budgets in the form of one-time cost-of-living adjustments which helped lower earnings households somewhat. However, even such measures weren’t enough to lift nearly 12% of people from poverty, accounting to around 630,000 individuals. If it weren’t for these single-instance relief measures, as many as 758,600 citizens could possibly be incarcerated in poverty.
The government thus has a responsibility with the Budget 2026 to provide much-needed aid to these lower-income households. Promises were made during the Programme for Government, key amongst them was the delivery of progressive budgets aimed primarily to shield those with low incomes.
The Social Protection Minister has a duty towards updating the social welfare rates to reflect 27.5% of the average weekly earnings. To make this a reality, a bump of €25 in weekly allowances is necessary. This in turn will provide assurance to those dependent on welfare, a certainty that is paramount given rising rents, utility costs and food prices.
Data from 2024 indicates the challenging situation for ageing citizens; over 106,000 older individuals were grappling to cover their basic expenses, a surge of 64% within a year. Temporary measures aside, one in five older citizens would be plunged beneath the poverty line. This underscores their susceptibility given their fixed income. The government should consider raising the State Contributory and Non-Contributory Pensions by €25 per week, and raise the living alone allowance by €10 per week, while also making the pensions universally applicable.
Consideration should be given to increase the Fuel Allowance by €10 per month and include those in receipt of the Working Family Payment as well. This step would also bring the added advantage of unlocking secondary benefits such as the availability of retrofitting grants.
Special attention is needed for those legally unable to work due to chronic illness or disability, who bear a significantly high risk of poverty and high deprivation rates. Encouragingly, the Programme for Government outlines commitments on a cost of disability payment. Hence, implementation of a disability allowance at an amount of €20 a week should be introduced in Budget 2026.
Carers play a significant role in providing unremunerated services to the State, with the number exceeding 299,000, a growth of 53% in just six years. Their recognition and support is important; at the minimum, rights for Free Travel for those receiving Domiciliary Care Allowance should be extended. Government should also consider increasing the Carer’s Support Grant to €2,150 annually, and raising Domiciliary Care Allowance to €385 monthly. An independent review of Carer’s Allowance is also required, along with a pilot scheme for Universal Basic Services and a Universal Basic Income Scheme for Carers at an expense of €10 million.
Child benefit is a pivotal tool in the fight against child poverty. In 2024, there were over 190,000 children living in poverty in Ireland, a shocking truth for everyone. The government should elevate Child Benefit by €506, increase the under-12 Child Support Payment by €6 and provide an extra €15 for those aged 12 and over.
They should also enforce the provision of an additional two-week paternity and parental leave. A large proportion of Irish people are currently subsisting on low incomes, a situation that desperately needs to change. The government should employ Budget 2026 to change this tide and uplift the living standards for vulnerable families. The initial proposal should be the establishment of adequate social welfare rates.
The post Preparing for Potential Trade War: Ireland’s Complicated Budget 2026 Conundrum appeared first on Real News Now.
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