Budget 2027 was announced by Government on the 6th October, the second Budget released in this Government’s term. Released as a “Budget for workers”, the critical question is whether this Budget has made efforts to address challenges in the worsening cost of living, worsening income inadequacy, exclusion and socio-economic disadvantage.
The labour market continues to perform strongly, with the number of people in employment at record levels. What remains, however, is the issue of accessible and inclusive employment measures for people who find themselves distanced from quality job opportunities. Over 150,000 people are unemployed and are looking to access employment according to the latest Labour Force Survey, alongside 110,600 in the Potential Additional Labour Force (PALF). We know that the costs of living, that were already challenging to deal with, are increasingly placing strains on people in unemployment, with the numbers of people in unemployment experiencing consistent poverty doubling in recent years. We must see changes to Government’s approach to ensuring people can access decent employment opportunities, can be lifted out of poverty, and can attain the minimum essential standards of living.
ESRI analysis claims that Budget 2027 will result in marginal gains for low-income households by matching forecasted price growth and wage growth[1]. Forecasted inflation, however, is kept at a constant figure of 3% for the entire population when we know that low-income households experience inflation at much higher rates, as most of the income is spent on household expenses. The Vincentian MESL Centre also notes that the Budget adjustments are largely in line with inflation, however, without meaningful increases in incomes “many low-income households will continue to experience the same difficulties in achieving an adequate standard of living”[2].
Achieving the ambitions of both the Roadmap for Social Inclusion, as well as the upcoming Pathways to Work Strategy requires significant targeted public investments in supports and services that both address the cost of living, and enable inclusive employment, both of which must seek to address the rising rates of poverty. Budget 2027 does not appear to focus on these ambitions. The increasing over-reliance on windfall corporation tax receipts in our tax base also leaves our public finances with an increasing underlying deficit. The INOU is concerned that in the event these taxes recede, it in once again people on low incomes who will bear the brunt of austerity measures that may be used to build the public finances back.
This analysis will look at the INOU’s key asks of Budget 2027 under the following areas:
- Income Adequacy
- Employment Services
- Employment and Employment Programmes
- Education and Skills
- Communities and Community Organisations
Income Adequacy
INOU Asks included:
- Maintain Working Age Payments personal rates with a €15 per week adjustment.
- Introduce a work-friendly Social Welfare system for Jobseekers based on hours worked rather than days worked. Increase the daily earnings income disregard for Jobseekers Allowance to €25 per day for the main claimant and introduced to the Qualified Adult also.
- End the age segregation still evident in the Jobseeker’s Allowance payment.
- Increase the capital means test on a Jobseeker’s Allowance payment from €20,000 to €35,000 and apply this change to Supplementary Welfare Allowance.
- Reverse the doubling of the Jobseekers Penalty Rate introduced in 2024.
- Expand access to the Christmas Bonus and the Fuel Allowance for people on Jobseeker’s Allowance or Supplementary Welfare Allowance for 6 months and over.
- Increase the Fuel Allowance by €4 per week and extend its duration to 32 weeks.
- Develop a social welfare health check that proactively informs people of available and appropriate supports and services, particularly when talking up work.
- Automate access to the Working Family Payment and Back to Work Family Dividend for families moving from welfare to work.
- Implement the Living Wage without further delays.
The Government’s Budget in this area:
- A €10 adjustment to all core social welfare payments will be introduced in January 2027. This is only 2/3 or what was needed in this Budget to begin to address the deep income adequacy experienced by people on Jobseeker’s Allowance.
- The reduced JA rate for young adults remains; though it is welcome that they will receive the €10 increase.
- Fuel allowance will increase by €5, however, the season remains at 26 weeks, and people on JA for less than a year remain ineligible for this payment.
- The Government will increase the National Minimum Wage to €14.94 from January 2027. Unfortunately, it has abandoned its own plans to introduce the Living Wage.
- There will be a €30 increase in weekly income thresholds for Working Family Payment, worth up to €18 per week.
- There will be an increase of €6 to Child Support Payments.
- A €10 increase in the employment earnings disregard for Disability Allowance and Blind Pension to €175 per week will be introduced from July 2027.
- Increase in employment earnings disregards for the One Parent Family Payment and Jobseeker’s Transitional Payment by €10.
While we are pleased to see income disregards change for some payments, no changes were made to the terms of the Jobseeker’s Allowance or the Supplementary Welfare Allowance, leaving in place rules that were first introduced two decades ago.
No changes were made to the rate of payment to the Jobseeker’s Pay-Related Benefit.
Many targeted payments that have been increased that are designed to alleviate poverty may not reach JA recipients, particularly for adults on JA who live alone, and people on JA for less than one year.
Employment Services
INOU Asks included:
- Ensure all working age people can access relevant supports from the Public Employment Service, regardless of whether they are in receipt of a social welfare payment.
- Invest and enable models of individualised wraparound supports, via the Local Area Employment Services, for people most distanced from the labour market, with recognition for the work taken at the pre-employment stage.
- Integrate guidance approaches and person-centred supports into the PES; for career development skills; and to meet the needs of people to engage and remain in the labour market.
Unfortunately, Government speeches and documents do not highlight efforts to address the need to further invest in Employment Services in Budget 2027. Several measures are a focus to encourage people on Disability Allowance to engage in employment, including changes to the Wage Subsidy Scheme and extension of the scheme to cover people on Partial Capacity Benefit. Little is noted on implementing the upcoming priorities in the Pathways to Work Strategy or supporting people in long-term unemployment to access quality supports from their Employment Services.
The Department of Social Protection makes no reference to employment services in its work in the Expenditure Report. It is noted, however, that a key action to be taken under “Efficiencies and Reforms” is its “expansion of online capability”. The INOU will continue to advocate for tailored and accessible supports in the Public Employment Service to suit the needs of the service user.
Employment and Employment Programmes
INOU asks in this area included:
- Increase the additional payment for participants in employment programmes by €10 and provide a travel pass to participants.
- Facilitate all employment programme participants to access their most meaningful learning option.
- Support people to address the initial costs of taking up employment by introducing a travel card or a voucher system if people are living in areas with few public transport options.
- Improve access to affordable and accessible childcare and eldercare.
- Extend the Back to Work Enterprise Allowance to three years - pay 50% of the participant’s social welfare payment in the third year.
- Extend the Back to Work Family Dividend by one year.
- Amend the rigid eligibility requirements for the Part-time Job Incentive Scheme and the Workplace Experience Programme.
- Develop stronger inclusive employment pathways across the Public Sector, including the Civil Service.
- Introduce amended Equality Legislation with the inclusion of Socio-Economic Status without further delays.
The Government measures in Budget 2027:
- An increase of €2.50 increase to TÚS and Community Employment participants, and a €5 increase for Job Incentive participants.
- Investment in childcare provision in an aim to increase affordability of childcare.
- There will be a €25 increase to training uplift on the Work Placement Experience Programme, from €115 to €140.
The INOU welcomes the increases to the top up payments for people who participate in employment activation programmes. This increase, however, will soon be eroded by price rises, including in the planned fare increases to public transport. Further actions can and should be taken to reducing barriers and enabling participation in inclusive employment opportunities.
Education and Skills
INOU Budget 2027 asks re: education and skills:
- Acknowledge the cost of participation in education and training and properly support adult learners, via increased social welfare investment, to meet these costs.
- Re-instate core funding towards ESOL classes to meet the high demand for these essential classes.
- Provide professional career and educational guidance and signposting to support people to access the most appropriate course.
- To close the widening digital literacy gap, ensure that unemployed people and vulnerable workers are supported to adapt and enhance their skills.
Budget 2027 measures:
- €150 million over three years for “Skills for the Artificial Intelligence (AI) Era”. It is unclear how this funding will be used, or whether courses will be available to those distanced from the labour market.
- €2 million for Literacy in the Workplace.
Budget 2027 does little in Education and Skills in delivering investment and much needed increases to core funding in education and adult learning. Government should commit to supporting adult learners, particularly those distanced from the labour market, in accessing education and training opportunities, particularly as a fundamental action to undertake in Government objectives in skills and lifelong learning.
Community Organisations and Communities
INOU Budget 2027 asks to support community organisations and the communities they work with:
- Invest an additional direct funding to community and voluntary organisations.
- Properly resource community groups in their work identifying and addressing the needs of people experiencing social and economic exclusion.
- Invest in capacity building measures in employment programmes to improve the supports available for the participants and organisations involved.
- Properly support community led social enterprises seeking to address exclusion from the labour market and improve access to affordable supports and services, including digital access and the investment to understand and adapt to the technological changes underway.
This area of Government policy is led by the Department of Rural and Community Development and the Gaeltacht. In the expenditure report, the Department notes that it has not secured funding to increase the staffing levels of the already small Department but has received an increase of €15 million in current expenditure.
- Under the SICAP and Other Local Supports sub-head "Savings will reduce the previously provided non-core funding for this area, with all funding for the subhead going forward to be made up of core funding. (...) In order to achieve this reduced level of funding a number of efficiencies will be driven within the broad SICAP area to ensure that community integration work is delivered to the same level, with reduced funding, and without impacting on existing SICAP cohorts."
- Increase of €5 million to the Community Service Programme.
- Increase of €1 million for the Scheme to Support National Organisation.
- Increase of €2 million to the Local Enhancement Programme.
The INOU welcomes the increases to funding for programmes under the Community Development Programme of the Department. Changes to the funding model of SICAP is a concern, and the increases of funding to the SSNO is unclear on how this funding will be allocated. It is unfortunate that there were no changes to funding announced in developing capacity building, or in supporting social enterprises.
[1] https://www.esri.ie/news/budget-2027-tax-and-welfare-measures-keep-pace-with-forecast-inflation-for-2027
[2] https://budgeting.ie/wp-content/uploads/2026/10/Budget-2027-MESL-Impact-Briefing.pdf