The Government has agreed new measures worth €290 million to combat the rise in the cost of living. This is in addition to the €215 million energy rebate.

Minister for Finance Paschal Donohoe and Minister for Public Expenditure and Reform Michael McGrath made the announcement at a press conference this evening.

The new package contains an increase in the energy rebate to €200 including VAT - this will be paid in April.

Minister McGrath said any unused part of the energy credit will be carried forward. Every household is guaranteed €200.

The scheme will become operational by the end of March, with payments appearing on bills as they are then issued. It will be automatic and people will not need to apply for it.

It also involves a 20% cut to public transport fares. This measure will take effect from April and last until the end of the year. It includes Bus Éireann, Iarnród Éireann, Dublin Bus, Go Ahead, Luas, DART and Local Link.

People who have already bought a yearly travel card will receive a credit.

There will also be a reduction in caps for school transport fees. This will be capped at €150 for primary level pupils and €500 at secondary level.

People who are claiming the Fuel Allowance will receive an extra €125 in a lump sum payment to be paid in early March to 390,000 recipients.

The Drugs Payment Scheme threshold will fall from €100 to €80 under the new measures. This will benefit just over 70,000 recipients.

The Working Family Payment budget increase of €10 announced on Budget Day will be brought forward from 1 June to 1 April.

Minister McGrath said: "The additional expenditure measures we are announcing today come to a total of €290 million and will make a positive impact on the incomes of all households in our country.

"A key concern in setting out these measures is to ensure that timely support is provided to all households specifically targeted at energy costs, while using the social welfare system to target additional support to those who are in receipt of the fuel allowance."

He urged anyone who is struggling with energy bills to liaise with their local community welfare officer.

Mr McGrath added: "There is an exceptional needs payment that can be made available for people struggling to meet the extra costs. Each case will be considered on its own merits and will be confidential."

Minister Donohoe said: "The rate of inflation that we have seen in the past few months has exceeded our expectations, mainly because of higher energy prices.

"While we expect the inflation rate to moderate from the second quarter of this year, it is nonetheless appropriate to respond to the increase in prices and today we are doing this.

"When taken in conjunction with the measures announced already, the Government package amounts to €505 million, a significant change."

Mr Donohoe said he appreciates the anxiety so many are facing in particular around energy pricing, adding as it stands there is a national debt of €230 billion. Decisions have to be made around that, he added.

The minister said if the ECB had changed its monetary policy guidance it could have had an impact on recovery.

Mr Donohoe said the ECB is aware of the challenges due to inflation.

Minister McGrath said he supports the policies around the changes to public transport fares.

He said there is an element of uncertainty around public transport which is why they are only committing to reducing fares until the end of the year, he stated.

Sinn Féin's Finance Spokesperson Pearse Doherty earlier contended that the plan would only "scratch the surface" of the problems being faced by lower and middle income workers.

His party has called for the carbon tax rise to be paused, a freeze on rents to be introduced and a payment to those earning up to €60,000.

Labour and the Social Democrats suggested a mini-budget was required to adequately deal with the financial problems triggered by inflation.

Speaking during Leaders' Questions in the Dáil, Mr Doherty said there are thousands and thousands of people who need support.

He told Mr Varadkar that it was "time for you and your colleagues to understand where people are at".

The Tánaiste replied that the Government knows that the cost of living is rising.

People are shocked when they see their electricity or gas bill and the cost of groceries are rising too, he said.

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Mr Varadkar said Budget 2022 had already provided €1bn in pension increases, welfare increases and tax reductions and that promises from the Opposition parties were "cheap" and their claims were often "not honest".

It comes as a RED C poll for the Society of the St Vincent de Paul suggests that the number of people struggling financially has risen from 9% to 18% since the start of the pandemic. 37% of people have cut back on essential heating and electricity use.

Mixed reaction from public to new measures

There was a mixture of views in Ballinasloe, Co Galway tonight to the measures announced by the Government.

The €200 energy rebate was broadly welcomed.

Local man Declan described it as "a great help, a mighty help for everyone in the town".

Declan said the energy rebate would be a great help

Another cyclist on the main street said it was welcome but the Government "could have done more".

Local man Fionn Doherty, who had just refuelled his car when he spoke to RTÉ, noted that while public transport fares had been cut, there was no help for motorists facing rising prices at the pumps.

"Fuel prices are really high, and it doesn't make up for that. But the package is a help regarding public transport and people can still get to where they need to."

Additional reporting Paul Cunningham, Joe Mag Raollaigh