Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

It is an important point. The ESRI report is based on something called the hypothetical wage index budget. There are, of course, other ways to index: one can index against inflation or one can not index at all. Depending on which model is used, one gets a different outcome. Essentially, what the ESRI report says is that there are increases in pensions, increases in welfare, cuts to income tax and cuts to USC, but, because over 1 million people are also getting a pay rise, everyone is worse off. It is a pretty strange index, if one looks at it that way.

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