There are concerns over how smaller businesses will cope with the increases.
The national minimum wage is set to increase as details of Budget 2024 are revealed ahead of Budget Day tomorrow, Tuesday, October 10.
The government plans to increase the minimum wage by €1.40 to €12.70. Yet, according to the Irish Independent, financial measures to soften the blow for employers will also be introduced. The increase amounts to 12% on top of the current rate of €11.30.
The plans are in line with proposals made by the Low Pay Commission to the government earlier in the year.
The increase means that those working 39 hours a week would earn an additional €54.60 per week from the start of 2024.
2023’s increase went from €10.50 to €11.30 on January 1st.
Government working on supporting smaller businesses with minimum wage increases.
The wage increase will come as a relief to those struggling with rising inflation, high interest rates, and the multitude of factors brought about by the cost-of-living crisis.
However, there are concerns that small and medium-sized businesses will be disproportionally affected by the 12% increase, with government ministers working on a “mechanism” to support high energy rates and higher labour costs.
Amid the news of the increases, some smaller businesses have said they are looking to automation and raising their prices in order to cut costs.
The Irish Independent reports that the government are considering a commercial rates waiver or an extension of the Temporary Business Energy Support Scheme (TBESS) to help smaller businesses cope with rising costs.
Taoiseach Leo Varadkar said: “We’re looking at a mechanism whereby we can give some help to small businesses in particular in the Budget and that’s a recognition that small businesses in particular, they’re facing increased energy costs, they’re also facing a lot of increased labour costs, in part because of government decisions to increase the minimum wage and bring in things like statutory sick pay.”
Further details of budget 2024 revealed
As well as the minimum wage increase, other key factors of Budget 2024 include a possible double payment of all welfare rates (paid in January) in addition to the December Christmas bonus.
There are also plans for a tax break for homeowners of around €1,000, as well as the rent tax credit set to increase from €500 to between €750 and €800.
Talks also included the plan to introduce pay-related benefits for people who lose their jobs, which would help ease the immediate financial strain for those who face unemployment.
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