The Minister for Finance says decisions made by the Government in last year's budget will help individuals and households cope with the cost of inflation.

Further decisions to reduce the price of energy bills will also assist the cost of living, he said.

The annual rate of inflation rose to 5.3% in November, its highest level since June 2001.

Paschal Donohoe said "mechanics" to reduce energy costs for people are being worked on at the moment and he expects they will come before the Dáil very soon.

The Minister said the Government wants to be confident that companies pass the full reduction onto customers.

Mr Donohoe said that it is a broad measure in response to broad pressure that people are feeling.

He added that changes have also been made to social welfare payments, including fuel payments.

Paschal Donohoe said the Government cannot insulate everyone fully from increases because there are many other priorities that need to be delivered.

These include a massive national effort to deal with Covid-19 and a wage subsidy scheme to support employers and employees.

The Minister said income tax has increased by €4 billion compared to 2020, which he said highlights the importance of having 2.5 million people in work and the "sensible" management of personal tax policy at a time when the economy was doing well.

Ireland will lose money as a result of increases to the corporation tax, the Minister said, adding that he expects the effects of these changes to be seen next year.

Mr Donohoe said that over 50,000 companies have participated in the wage subsidy scheme and the overwhelming majority have stuck to the spirit of the law.

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He said access to the programme was made very simple and it has worked.

But he added that that those who are in the scheme and do not need the money should return it - as the majority of companies have.