Rising energy prices set to impact Irish retired couples

Increases to welfare payments and tax bands announced in the 2022 Irish Budget will, on average, compensate households for increased energy costs, according to new research from the Economic and Social Research Institute (ESRI).

Nevertheless, according to the Irish research body, inadequate increases to the Working Families Payment and state pension, also laid out in the 2022 Budget, mean some retired couples and low-income working parents could be negatively impact by the hikes.

In particular, those who do not receive Fuel Allowance could see their disposable income eroded by rising prices, the body warned.

“The changes announced in Budget 2022 will on average compensate households for forecast price growth and leave poverty slightly lower than would an inflation-proofed budget. However, some low-income working parents and retired couples will see real cuts to their payments, as will many others if price rises turn out to be larger than forecast,” said ESRI senior research officer, Karina Doorley.

The ongoing energy crisis in Europe and the UK could pose significant threats to households and incomes.

According to Europe’s leading benchmark, the Dutch Title Transfer Facility, prices have risen from €16 megawatt per hour in early January, to €75 by mid-September, a hike of more than 360% in less than a year, according to ICE data.

In Spain, soaring electricity prices have prompted protests against the government, whilst in Germany, power prices have exceeded their 2008 highs.

Depending on the extent of price surges, European governments could decide to directly inject cash, as France does with its chèque énergie, offering relief for those struggling to pay bills, though, such instruments could throw nations into debt and impede economic recovery efforts from the pandemic.

On Wednesday, the EU’s executive arm advised its 27 member states to implement tax cuts, state aid, and other measures to help households fare through.

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