Brian Brennan (Wicklow-Wexford, Fine Gael)
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654. To ask the Minister for Employment Affairs and Social Protection how the budget increase of €12 for contributory and non-contributory pensions has been reached each year; if consideration has been given to index-linking these payments, as done in some EU countries; and if he will make a statement on the matter. [2400/25]

Dara Calleary (Mayo, Fianna Fail)
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The Roadmap for Social Inclusion 2020-2025 contains a commitment to develop a benchmarking approach for use in adjusting the value of State pension payments. The approach proposed by the Department, known as the smoothed earnings approach, was subsequently endorsed by the Pensions Commission.

In 2022 following on from the work of the Pensions Commission, Government decided that the Minister for Social Protection would, in submitting budget options, set out a rate of pension payment calculated using the smoothed earnings benchmark approach as an input for consideration as part of Budget discussions, on an annual basis, starting from September 2023.

Since then, this calculation was prepared and submitted annually to Government, most recently in September 2024, as part of preparations for Budget 2025. In assessing Budget options, and taking account of this calculation, Government was mindful that the cost of living pressures are most acute over the winter period. For that reason, rather than taking a simplistic approach to applying an indexed rate of increase to weekly rates of payment, the Government decided to 'front-load' supports through the provision of a range of once-off payments, including extra payments for people receiving Fuel Allowance, those in receipt of carer's payments and those living alone.

These payments were provided in addition, not only to the €12 increase in the weekly payment rate, but to the double week payments delivered in both October and December.

This combination of once-off payments in conjunction with the €12 weekly rate increase which came into effect only this month, not only exceeds the value of a benchmarked increase but ensures that a significant proportion of this value is delivered when people need it most over the winter period.

Post Budget analysis by the ESRI that shows that the package of measures introduced under Budget 2025 have resulted in average gains in income for most households this year.