Third-level students availing of the the Student Grant Scheme will be able to earn more money over summer without losing eligibility for the grant next year.
The Government has approved an increase to the "holiday earnings income disregard" from €4,500 to €6,552, meaning students can earn an additional €2,000 during their academic break and other non-term time periods.
Tánaiste Leo Varadkar said this will give students the option to work more hours over the summer without losing any of their student grant.
"It's one of a number of things we are doing to make work pay amd help students. It’s also good for businesses around the country which are struggling to get staff," Mr Varadkar said.
The Minister for Further and Higher Education said it was "clear this has been playing on the minds of students".
"Businesses have also highlighted the shortage in students willing to work over the summer, particularly in the tourism and hospitality sector," Simon Harris said.
Until now, students could earn a maximum of €4,500 during non-term time.
Any earnings outside of that would be considered as income and could affect their student grant.
These measures are part of a broader number of reforms to the student grant scheme
From September, all maintenance grants will increase by €200.
The income thresholds have been increased and the adjacency rate has also been amended meaning more students will qualify for a higher level of support.
Mr Harris has also outlined his intention to make further changes to the scheme over the course of a number of Budgets.
Mr Harris also announced that Cabinet has approved measures to improve access to further and higher level education for displaced Ukrainian students.
They will be treated as European students and will not be subjected to international fees.
The national Erasmus grant allocation will also be used to fund financial supports for qualified persons who undertake full-time studies in higher education institutions, as well as displaced academic staff.
Displaced Ukrainian students will also be eligible to access the Springboard+ programme and PLC courses.