The Government’s new €100 energy credit will cover at most only 20pc of the cost of electricity bill increases.
The Commission for Regulation of Utilities (CRU) estimates electricity and gas bills will increase by €500 in the coming 12 months following major hikes in costs last year.
However, this may be at the lower end of the scale, with companies such as price comparison website Bonkers.ie suggesting energy costs could rise by as much as €1,300.
It comes as the Cabinet signed off on a €100 energy credit that will reduce electricity bills in March.
The new credit will also include the cost of VAT, which means people will get €113.50 off their bill.
However, the credit will make only a small dent in the cost of living for homeowners who are struggling with the rising cost of energy and other bills.
Speaking in the Dáil, Sinn Féin leader Mary Lou McDonald said the €100 subvention for electricity bills would not be enough to support families struggling with the financial burden of energy costs
Ms McDonald said the cost of putting food on the table was to go up by nearly €800, the cost of running a car by an average of €500, and all in the context of record rents.
She said families were paying the equivalent of a second mortgage in childcare costs, while the cost of lighting and heating a home was up by “a massive 53pc”.
“All of this adds up to a cost of living that is unbearable, and the Government must urgently deliver a plan that gets these costs down,” she added.
Labour Party leader Alan Kelly said the energy credit was a “joke” and accused the Government of “not living in the real world”. The €100 for bills was “tokenistic and insulting”, he added.
Taoiseach Micheál Martin warned inflation could get “even worse” and last longer than was expected by the European Central Bank (ECB).
He said international energy costs were linked to the majority of gas flow to western Europe being controlled by Russia.
Inflation had picked up around the world, Mr Martin said, and it seemed to him the problem could last longer than anticipated.
The ECB expects inflation to fall in the latter half of this year – it is at a current level of 5.5pc.
The Cabinet signed off on a plan to spend an estimated €215m on the energy credit.
The Electricity Costs (Dom- estic Electricity Accounts) Emergency Measures Bill is due to go before the Dáil and Seanad early next month and it is expected to be passed within a week.
It is hoped once the legislation is passed, bill payers will get the deduction by the middle of March. The credit will be paid directly to energy suppliers and customers will not have to apply for it.
Energy Minister Eamon Ryan’s department is still working on a mechanism to give the tax credit to people who have pre-paid electricity meters. An announcement on how this will work is expected shortly.
The Government will urge landlords to pass on the saving to their tenants if they are paying the electricity bills on behalf of renters and including the cost in their monthly rent.
This issue has been examined by officials, and it was established there are hundreds rather than thousands of tenants for whom this problem could potentially arise.
The Residential Tenancies Board (RTB) will be tasked with settling any dispute involving tenants who believe landlords who pay electricity bills are not passing on the saving to them.
Mr Ryan has sought approval to bypass pre-legislative scrutiny of the new scheme.
However, he has offered to give the Oireachtas Energy Committee a briefing on his plans.
Meanwhile, Mr Kelly pointed out Central Bank governor Gabriel Makhlouf has said recent energy price increases were significant.
The prices of milk, bread and butter have gone up by 10 to 20pc. These were household staples, and even pasta had gone up by 5pc.
A litre of diesel cost €1.20 a year ago and now it had reached €1.60, he said. International factors were “not an excuse”.
The Labour Party is to bring a motion to the Dáil this week that proposes a €200 carbon credit for people earning under €50,000.