Minister for Public Expenditure Brendan Howlin has announced an increase in the minimum wage from €8.65 to €9.15 per hour.
The rise will take effect from 1 January and means that under this Government, the minimum wage has increased by nearly 20%.
Minister Howlin said that the increase, coupled with the cuts in the Universal Social Charge, "confirms our commitment to helping the low paid".
"We want to make work pay," he added.
The Government's message ahead of today's Budget was that it would make work pay, particularly for the low paid.
The Irish Congress of Trade Unions has described the measures to assist the low paid as a stepping stone to a living wage, but warned of inequity in the tax system.
The Irish National Organisation of the Unemployed welcomed measures to encourage the transition from welfare to work, but cautioned there was much more to be done.