The employers' body, IBEC, has called for social welfare payments to be reduced by 3% in Tuesday's supplementary Budget.
The proposal is contained in the organisation's pre-Budget submission to Government, which also includes calls for a short-term emergency support package for enterprise and an increase to the income levy.
IBEC says increases to social welfare payments in last year's Budget were awarded on the basis of a forecasted inflation rate of 2.5%. Given that consumer prices are now predicted to fall by 5% this year, it says social welfare payments should come down too.
It says that a 3% cut would provide savings of €400m this year.
IBEC also says that any new tax measures should be simple to administer from a business perspective, and for that reason, it recommends increasing the income levy for this year only.
However, in its pre-Budget submission, St Vincent De Paul insists welfare payments should be left alone.
It says while inflation may be coming down, poorer households are spending a large proportion of their income in areas where prices are still high like electricity, heating, food and education.
