Budget 2021 Ireland: full list of major planned changes to PUPs, carbon tax and fuel prices

The pandemic unemployment payment cuts for hundreds of thousands of people who lost their jobs in the coronavirus crisis are unlikely to be reinstated in the budget.

The government has been under pressure to restore the payment to its original 350 euros after it was cut in July.

Finance Minister Paschal Donohoe is expected to announce up to € 9 billion for social welfare on Tuesday.

The government’s financial plan will see no increase in income tax and a VAT reduction from 13% to 9% is also likely, in a bid to boost the ailing hotel sector.

Smokers are likely to see a rise in the price of cigarettes, but an increase in alcohol is less clear given the suffering in the bar trade in recent months.

Labor social protection spokesman Seán Sherlock called for a commitment to pay the double Christmas welfare bonus and the reinstatement of an additional four weeks of fuel allowance.

He said: “One of the consequences of Covid-19 is that people are spending more time at home and this is leading to much higher heating costs and electricity bills.

“The government has to recognize that in the budget.

“While we had asked for it to be rounded by € 5.50 to € 40 per week, reports today indicate that it would be increased by € 3.50.

“Earlier this year, an additional four weeks of fuel allocation was paid as part of the 2019/2020 fuel allocation season, so it is essential that the level of support is also restored.

The 200,000 elderly and vulnerable people receiving the living allowance will only receive a € 5 per week increase in this year’s budget, The Irish Independent reported.

The weekly payment is expected to jump from € 14 to € 19.

But the carbon tax will increase, adding € 1.28 to the cost of a 60-liter gas tank or € 1.47 to the same amount of diesel.

A lifeline for the live entertainment industry is also proposed with a planned grant scheme.

A commercial fee waiver in place to help businesses could also be extended through April next year.

The government expects to have a budget deficit this year of just over € 21 billion or 6% of GDP.

The figures are contained in the White Paper, which details public finances before any decision that may be made on next week’s budget.