Pensioner boost as granny flat grant confirmed and Christmas bonus restored
- The grant will incentivise older people to convert their houses into rental accommodation
- The Christmas bonus will also be fully restored for welfare recipients
- Prescription charges will also be reduced by 50c for older people
The granny flat grant will be announced in next week's Budget alongside a fully restored Christmas bonus and perks to help people pay for medicines.
The Independent Alliance is understood to have secured a raft of demands in pre-Budget negotiations.
Meanwhile, Fianna Fáil is understood to have secured an increase in the level of funding per pupil in a school.
However, there are ongoing tensions between Fine Gael and the Independent Alliance over Finance Minister Paschal Donohoe's plans to increase the 9pc VAT rate.
The grant, first revealed by the Irish Independent this week, will incentivise older people to convert their houses into rental accommodation.
A source told the Irish Independent: "A version of the 'granny flat grant' has been agreed in principle.
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"The details have to be worked out but it is likely to apply for conversation and house extensions."
Experts have cautioned that the grant would need to be significant in order to have any impact, as such work can cost upwards of €50,000.
Meanwhile, the Christmas bonus will be fully restored for welfare recipients in this year's Budget, the Irish Independent can also reveal.
State pensions, jobseeker and disability payments will now be doubled in the lead up to Christmas under an agreement reached between Fine Gael and the Independent Alliance.
Welfare recipients currently receive an additional 85pc of their weekly payment in early December.
The payment will be increased to 100pc this year by Social Protection Minister Regina Doherty.
Pensioners in receipt of the contributory State pension will receive an additional €232 under the Christmas bonus scheme.
Prescription charges will also be reduced by 50c for older people meaning each drugs bought by medical card holders aged over 70 will cost €1.50 per item.
The threshold for the Drug Payment Scheme is also set to be reduced, which is being claimed as another victory by the group of Independents led by Transport Minister Shane Ross.
However, a Department of Health source said any changes to the scheme had not been finalised.
Gambling taxes will be increased from 1pc to 2pc following demands from Junior Education Minister John Halligan. The move will raise an additional €52m part of which will be ring-fenced for addiction services and counselling in third-level institutions.
However, sources say Mr Ross is 'digging in' on increasing the VAT rate over concerns he has about the impact it will have on the tourism industry after Brexit.
But the Alliance was told if the lower VAT rate is not raised other revenue raising measures will have to be introduced such as increasing taxes on petrol and diesel.
Fianna Fáil is not objecting to an increase in the 9pc VAT rate.
Taoiseach Leo Varadkar was asked about potential Budget plans to increase VAT on the hospitality sector and concerns about such a prospect from the Independent Alliance minister Finian McGrath.
The Taoiseach said that at this stage in the economic cycle and entering a "potential period of great risk" with Brexit "it's more important than ever that we have a balanced budget next Tuesday".
"And I can understand why everyone is calling for no tax increases or even lower taxes or spending in loads of areas, but unfortunately that just doesn't add up.
"There only is a certain amount of money and you have to match the amount of money you bring in revenue with the amount that you spend."