The Minister for Finance Paschal Donohoe has said that after nearly two years of anxiety and trauma of a pandemic, Irish people are facing new challenges with the rising cost of living.

Paschal Donohoe today described the rising cost of living as "such a test" and "so difficult for so many".

He said the Government is implementing what it said it would do to respond to the "great challenge" of rising energy prices which they "knew was coming".

This includes a reduction of €100 on energy bills, "key changes" in social welfare payments, qualified children's allowance, and living alone allowance.

It also includes important changes to the tax code and tax credits, to help deal with a challenge that the Minister said he had acknowledged on Budget Day could develop this year.

"The Government is recommitting after the pandemic to deal with issues relating to housing - central to the challenges and anxiety that many face about their future," the Minister said on the Today with Claire Byrne Show today.

He said this year the Government is planning to deliver 8,000 social homes.

"We can't deal with the challenges without more homes being built and we have plans to do that this year and beyond," the Minister stated.

Mr Donohoe said interventions to ensure people have the help they need for essentials such as heat in their homes are already there, with emergency payments available to help citizens who face challenges.

But he said he would rather be in a position where there is not a need for those payments.

He said he expects the energy pressures will decrease during the year and will not be as intense as they are now as long as the situation overseas stabilises.

Measures that they have been put in place, particularly regarding social welfare and tax, will be in place for the year, he added.

Mr Donohoe also said that in a normal economy without a pandemic, it would be typical that there are employers who are no longer viable and businesses close as a result.

But he said that during the pandemic there was an abnormally low level of business failures because of "the extraordinary supports" that have been put in place.

But he said during this year and next year it is likely that "normal changes" in the economy will begin again where some employers will move from business to business.

The Minister said we need to make sure that those who work in those businesses have jobs to go to.

He said it is difficult to assess the level of risk and it is difficult to model what firms will be affected as the Government changes its supports.

But he added that the supports have run for so long to give every employer "every help possible".