The Living Wage Technical Group (LWTG) has said the reference hourly living wage rate should rise to €13.85 per hour, an increase of 7.4% on last year's recommended rate of €12.90 per hour.

The LWTG is a group supported by trade unions and charities that was formed in 2014 to establish a methodology for calculating the living wage which is defined as the minimum amount people need to live and take part in Irish society.

Last month, Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar announced that the Government had accepted the recommendation of the Low Pay Commission to increase the national minimum wage to €11.30 per hour from 1 January 2023.

This represents an 80 cent increase, or 7.6%, on the current minimum wage of €10.50 per hour.

The Tánaiste also announced at the time that the Low Pay Commission had set an indicative living wage for 2023 of €13.10 per hour.

It is planned that the living wage will be phased in between now and 2026 when it will become mandatory.

The LWTG said, however, that the living wage rate should be €13.85 per hour due to the rising cost of living, with rent increases cited as the main factor.

"Having an income below this standard of living means doing without goods and services which are essential for taking part in the norms of everyday life in Ireland," said Robert Thornton, Research Manager with the Vincentian MESL Research Centre and a member of the LWTG.

"The Republic of Ireland Living Wage was established in 2014 and is part of a growing international set of similar figures which reflect a belief across societies that individuals working full‐time should be able to earn enough to enjoy a decent standard of living and meet minimum essential living costs," Mr Thornton said.

Reacting to the news, Lidl Ireland said it had committed to the latest living wage rate of €13.85 for 2023.

The retailer said it will invest €7.5m to introduce the change that will benefit its 4,200 employees across the country, as all other employees currently earn in excess of the new Living Wage.