A possible cut to third-level student fees and a potential welfare payments Christmas bonus remain on the table for inclusion in the budget as talks enter a crunch phase this weekend.
However, many households stand to get significantly less this year than in recent budgets.
Minister for Finance Paschal Donohoe has ruled out a personal tax package, the first time this has happened in recent years.
Meanwhile, there are doubts over whether an increase in core welfare payments will match the €12-a-week delivered last year.
RM Block
Sources believe negotiations could go down to the wire in advance of the budget being delivered on Tuesday by Mr Donohoe and Minister for Public Expenditure Jack Chambers.
High-spending Government departments including social protection, health and education are yet to have their budget packages signed off. Coalition leaders are expected to meet over the weekend as preparations continue.
Minister for Social Protection Dara Calleary has been pushing for a €12-a-week increase in core welfare payments, including the State pension.
The Irish Times understands this may not be achieved amid a focus within the Coalition on delivering other targeted welfare measures.
Sources stressed the social protection allocation was unlikely to be agreed before Sunday at the earliest, but suggested delivering a €12 weekly rise would mean fewer resources for other measures in the area.
The prospect of a Christmas bonus double payment of welfare benefits remains a possibility.
At a press conference on Friday Mr Chambers would not be drawn on the Christmas bonus, saying: “That’s a decision for budget day.”
The Coalition has long signalled that the once-off cost-of-living measures that had been included in recent budgets would be dropped, while support would focus on vulnerable households.
One such temporary measure in recent years was a €1,000 cut to the €3,000 student contribution fee.
While this level of reduction is unlikely to be repeated, the possibility of a lower permanent reduction remains on the table as does a rise in the income thresholds for student grants. Deliberations on the higher education budget are continuing.
Meanwhile, Mr Donohoe confirmed on Friday night there would be no changes to personal income tax as part of the expected €1.5 billion taxation package.
He said tax measures would instead focus on protecting jobs and enhancing Ireland’s competitiveness.
The Irish Times reported earlier this week there would be no room for income-tax changes due to expected measures such as a VAT cut for hospitality, a reduction in VAT for apartments, the continuation of the renter’s tax credit and lower VAT rate for gas and electricity.
Not increasing income-tax bands and credits to match inflation will increase the income-tax burden on many households next year as wage increases push more income into the higher 40 per cent tax rate.
Meanwhile, there will be no one-off payments such as energy credits to cushion the blow.
Mr Donohoe said Budget 2026 would be focused on “targeted measures that we believe can make a difference in supporting households with the rising cost of living” and, when it comes to taxation measures, “our focus is on jobs and it’s on investment”.
Several departments are yet to have their budget allocations signed off on, but those understood to have finished talks include foreign affairs, defence and agriculture.
There is set to be an increase in overseas development aid from the foreign affairs allocation next year while a plan to tackle bovine tuberculosis on farms is expected to be provided for in the agriculture budget.
Meanwhile, it is understood that funding is to be provided for as many as 1,000 new gardaí.
Key pre-budget figures due to be published today show the Department of Finance expect taxes to continue to rise strongly in 2026, and that Mr Donohoe should be able to forecast a healthy surplus next year.
