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TDs pushing for €10-a-week Budget hike to state pension

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Tánaiste Leo Varadkar. Photo: Gareth Chaney/Collins

Tánaiste Leo Varadkar. Photo: Gareth Chaney/Collins

Tánaiste Leo Varadkar. Photo: Gareth Chaney/Collins

FINE Gael TDs are pushing for an increase in the State pension of as much as €10-a-week in the Budget as Tánaiste Leo Varadkar also heard calls from his own party to abandon plans for a pandemic bonus and the expected increase in carbon tax.

Former minister Paul Kehoe told the Fine Gael parliamentary party meeting on Wednesday that plans to offer frontline workers vouchers of up to €500 as a reward for their efforts during the pandemic was a “mad crazy idea”.

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Citing calls by teachers' unions to be included in any bonus payment, Mr Kehoe warned the plan could lead to division between the public and private sector and compared it to “throwing around money like a snuff at a wake".

Mr Kehoe also backed calls from his fellow former minister John Paul Phelan to increase the weekly State pension by no less than €5 and potentially as much as €10.

Mr Phelan’s call for an increase in the pension also received support from former Cabinet minister Michael Ring who said pensioners deserved an increase and that the Government did not want them "on our backs again”.

Mr Ring also said he had written to Finance Minister Paschal Donohoe and Climate Action Minister Eamon Ryan asking for no increases in the carbon tax this year due to the rising cost of heating for consumers.

Mr Ring heavily criticised the Green Party, claiming they did not understand what rural Ireland is about and warning that if something was not done about Mr Ryan's policy agenda “there will be no rural Ireland left”.

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The rising cost of energy was raised by several contributors to the meeting, but Mr Donohoe was said to have ruled out revisiting the carbon tax which by law is due to increase by €7.50 every year until 2029.

Mr Varadkar told the meeting that he was “reasonably confident” there would be no blackouts this winter but said there was “no guarantee”.

He was also said to be tight-lipped on the Government’s plans for the Budget, which will be announced on October 12.

However, both he and Mr Donohoe signalled that the rising cost of living will be addressed by index-linking tax credits and bands to take account of inflation.

Mr Varadkar told colleagues that in addition to spending an additional €1bn, there would be a tax package of around €500m in the Budget the week after next.

He said as part of this it was important to reward work and protect people from rising inflation by increasing tax credits and tax bands.

The Fine Gael leader gave an example of an average person earning €40,000 per year who may get an average wage increase of about 2.5pc or an extra €1,000 but they would lose most of that to income tax, USC and PRSI, and take home only €490.

However, changes to tax credits and bands in the Budget would see them take home between €750 or €800 after tax, Mr Varadkar told colleagues.

He said Fine Gael needed to push back against the idea of this being a tax cut. Mr Donohoe said later that the party had to make the case for people to be able to use most of any pay increase they get next year.


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