The pension increase is currently expected to be at least €7.50 a week. This would represent a smaller rise than the €10 increase introduced last year, although ministers have not yet settled on the final amount.
Government sources indicate that the eventual increase could be above €7.50, but is unlikely to reach €10. The decision is being considered alongside a number of other measures intended to provide support to households during the winter.
Among the proposals being examined are changes to the Fuel Allowance and an increase in the Living Alone Allowance. Ministers are also considering the possibility of a once-off payment for Fuel Allowance recipients as concerns grow about continuing energy costs.
The Government is placing particular attention on supports aimed at people considered most vulnerable to rising costs. Measures under discussion include a new payment linked to the cost of disability and initiatives intended to tackle child poverty.
Childcare is also expected to feature prominently in the Budget. The Government is considering increasing the subsidy available through the National Childcare Scheme, which would reduce the fees paid by parents. Changes could begin in January, earlier than the September start date used for last year’s measures.
The scale of any welfare increase is partly linked to the wider cost of the Budget. Every additional €1 paid through the core welfare rates is estimated to cost approximately €75m. A €10 increase would therefore require around €750m in additional Exchequer spending.
Energy supports are another important part of the discussions. A reduction in carbon tax on home-heating oil has been considered, with the measure potentially affecting up to 700,000 households. The Government is also examining whether the reduction could remain for the duration of the Coalition.
A €5 weekly increase in the Fuel Allowance is among the other measures being considered. Over the winter period, this would provide recipients with an additional €160.
Motorists may also receive continued assistance, with reduced excise duties on petrol and diesel expected to remain in place into early next year. The move is intended to provide greater certainty while global developments continue to influence fuel prices.
The Government has acknowledged that it cannot completely shield households from international energy shocks. Instead, ministers are concentrating on directing available resources towards households most affected by rising costs while balancing those measures against wider Budget commitments.
