BUDGET 2026 must be “sensible and prudent” as Ireland faces into Donald Trump’s 30 per cent tariff threats, a group has said.
Taoiseach Micheal Martin has already ruled out a repeat of Budget 2025’s €2.6 billion cost-of-living bonanza whilst Finance Minister Pachal Donohoe said October’s budget will be “more normal”.
And The Irish Times this morning reported that Budget boosts worth up to €1,000 per worker have been dropped from October’s plans.
Government leaders have agreed on the complete elimination of one-off payments such as energy credits, double welfare and Child Benefit double boosts.
The one-off cash boosts have benefited the average worker by about €1,000 each.
Donohoe and Public Expenditure Minister Jack Chambers previously admitted that they are reluctant to make any spending or taxation decisions in Budget 2026 that “create new risks”.
Business group IBEC urged the government to take a “measured and strategic” approach to the budget later this year, calling for targeted investment in areas that enhance productivity and competitiveness.
Ibec said a Budget package of €3 billion – including €1.3 billion in additional infrastructure spending under the National Development Plan – is “appropriate for Budget 2026”.
The lobby group warned that tariffs “post a serious threat to Irish business” and said the economic model Ireland has relied on for the past five decades is under serious strain.
US President Donald Trump threatened to impose a 30 per cent tariff on imports from the EU and Mexico from August 1 in a shock announcement last week following months of negotiations.
Ibec’s Executive Director of Lobbying and Influence told RTE Budget 2026 will predominately focus on the “stress and pressure” in our traded economy and the uncertainty of a potential global trade war.
Fergal O’Brien said if the 30 per cent tariff did become a reality, “it will be extremely damaging”.
He said Ibec members also have “a lot of concerns” about what countermeasures will be introduced by the EU.
Minister Donohoe said the balance has to be struck between spending money on big projects, keeping public finances safe and spending money on immediate needs in Budget 2026.
He said: “Every single budget that a Government brings forward and that the previous Government brought forward does find different ways of helping with cost of living challenges within our society.
“But we do have to get the balance right.
“We are also living in very uncertain times – we have to be careful with our public finances. We also need to find ways that we can invest more in our future.”
BUDGET 2025’S ONCE-OFF LUMP SUMS
The Budget 2025 package – the largest in the history of the State – was made up of a mixture of increased payments, 10 once-off lump sums for social welfare recipients, a minimum wage increase and tax changes.
It included two double Child Benefit payments handed out before Christmas, €400 extra for carers and €300 for those on Fuel Allowance.
Budget 2025 also provided an additional October cost-of-living double payment as well as the usual social welfare Christmas bonus.
However, the State has ruled out another budget bonanza filled with once-off lump sums, electricity credits and tax cuts.
Calls have been made for all weekly core social welfare rates to rise by €25 and for a €50 hike to monthly Child Benefit cash in Budget 2025.
But instead, the government confirmed it is focusing on a more targeted approach.
CHILD SUPPORT INCREASE DEMAND
The Society of Saint Vincent de Paul today called for a €6 Child Support increase for kids under 12 and €15 increase for over 12s in its pre-budget submission.
Rose McGowan, SVP National President, said over 45,000 more children across Ireland are now living in consistent poverty.
She said: “These are not abstract statistics – they represent children growing up in cold bedrooms, going to school hungry, and missing out on the social and educational experiences that are fundamental to a healthy childhood.
“We know from our experience on the frontline that the right policy choices do make a difference – we saw it with the introduction of free schoolbooks and hot school meals.
“Budget 2026 must continue that momentum, with targeted structural reforms to ensure adequate incomes and real pathways out of poverty.”
Social Justice Ireland has also called for the increase of supports for families, urging the government to increase Child Benefit by €50 and increase Child Support Payments by €6 and €15.
BUDGET 2026 PROPOSALS
THE Society of Saint Vincent de Paul has called for an increase in child supports, living alone and disability payments in Budget 2026.
The charity said temporary, one-off cost-of-living payments from the government provided critical short-term relief in recent years but targeted supports will give “support where it’s most needed”.
It has proposed a number of items for Budget 2026:
- Increase and Index-Link the Income Disregard for One-Parent Family Payment and Jobseeker’s Transitional Payment
- Make childcare affordable by increasing the subsidy and threshold for the National Childcare Scheme
- Ensure every child in emergency accommodation has access to a child support worker
- Continue roll out of free hot school meals to all children and ensure ongoing evaluation of nutritional content
- Increase provision of social housing stock and affordable cost rental homes
- Introduce a homeless prevention budget amounting to 20 per cent of all homeless expenditure
- Provide capital funding to address the long-term accommodation needs for those in direct provision with status to remain
- Allocate €10 million to establish local, publicly run Early Childhood, Education and Care services
- Make our state education system truly free by removing costs and charges to families including mock exam and correction fees, electronic devices and school uniforms
- Benchmark SUSI grants and reckonable income levels against the cost of living
- Increase Fuel Allowance by €9.50 per week
- Extend the Fuel Allowance to recipients of the working Family Payment
- Pilot a community energy advice service.
- Increase funding to the Waiting List Initiative to clear the waiting list and backlog for the Assessment of Need process
- Allocate sufficient funding to fully implement the National Therapy Service in mainstream education settings
Minister for Social Protection Dara Calleary has already confirmed his department is “working on” a targeted new Child Benefit payment as part of “key” efforts to tackle child poverty in Ireland.
However, the Fianna Fail TD has ruled out upping the payment by 10 per cent for everyone, including those under 18 not in education and children in the International Protection process.
A “second tier” boost worth an average €285 each month would allow lower-income families to top up the existing €140-a-month benefit currently paid out to around 650,000 Irish families.
The €140 flat payment would still be paid to everyone, regardless of income.
JOB LOSS FEAR
Social Justice Ireland has also said the payment rate of jobseekers aged 18 and 24 should be increased to the full adult rate.
But Tanaiste Simon Harris recently claimed that people on the dole should not get the same budget pay bounce as pensioners while Ireland is at full employment.
He indicated that the Government may freeze the jobseekers allowance at its current level instead of including it in any social welfare increases in the upcoming budget.
Harris today confirmed that Trump’s threatened 30 per cent trade tariffs could have a significant impact on the economy and lead to job losses occurring quicker than anticipated.
Speaking on his way into Government Buildings this morning, Harris said: “We’re going to have to pull together in the hours and days ahead as we try to navigate our way through the latest scenario in relation to trade tariffs.”
Ibec today warned that Ireland needs to make the right choices to safeguard our competitiveness and ability to attract and retain business.
Ibec’s Chief Economist and Head of National Policy, Gerard Brady, told RTE: “That means investing in productivity focused areas like infrastructure and committing to continue that investment regardless of the economic climate.”
