Dr. Claire Keane:

As Dr. Doorley pointed out, accounting for just the past few months might give a figure that is different from that of the average year. That would probably happen more when there is a large increase in inflation. In this case, one might want to use a more recent figure than the yearly average. It is precisely as the Deputy said in that it is easy to say an average can be used, but if people are facing much higher costs in the shorter term, it is an issue. In this case, we could use the example I gave earlier, whereby a forecast is looked at. If the forecast were very different from the yearly average, it could be used for the time being. One could then look ahead to the next year’s budget and ask how close the forecast was and whether the increase was too much or not enough. A correction could be made so that even if the forecasts were constantly ahead of the reality, it would not be necessary to go back constantly to cut social welfare rates; one could, perhaps, just limit the increase the following year.

In general, these things settle down over time. There will be certain years with spikes. Unfortunately, this year is one of them. However, if it is felt there has been an overshoot, the increase can always be tempered down the following year. If the forecast is 6% and the reality is 4%, one might not increase by as much the following year, but at least people on social welfare would be given an adequate increase in the shorter term to deal with the costs they are facing.