Budget 2027 Falls Short for Communities
The Wheel has welcomed an increase in the VAT Compensation Scheme for charities, but said the overall Budget package falls short for people who rely on the services they provide.
Individual measures such as the €10 weekly increase in social welfare and state pension payments, an increase in the fuel allowance payment, and a new €500 cost-of-disability payment are welcome, but they are inadequate to address rising inequality and poverty.
Commenting, Dónall Geoghegan, Director of Policy and Advocacy, said:
“While Government has taken some steps to shield people from cost-of-living pressures, these are inadequate for people who need it the most and are unlikely to put a significant dent in the growing levels of poverty and inequality in Irish society.
Critically, income support measures are only one side of the coin. Essential services are on the other side and, despite the recognition by Tanaiste of the vital contribution of charities, this Budget does not adequately invest in tackling poverty and inequality through the provision of essential services by community and voluntary organisations. These organisations are telling us that the cost-of-living challenge has led to increasing demand for quality services and supports – by people with disabilities, older people living alone, young people, people facing homelessness, people affected by domestic, sexual and gender-based violence, and many more”.
The Wheel had urged Government to put funding for these services and supports on a multi-annual basis, but there is no mention of this being advanced in Budget 2027. This comes in stark contrast with the recognition of the vital contribution of charities and the need to better invest in services and infrastructure our future depends on.
Mr. Geoghegan continued, “We know that multi-annual funding works. Some organisations are funded by the state on a multi-annual basis to provide services and supports, but they are in the minority. The Government failed to signal any change which would allow organisations to plan properly and to retain good staff. It is the people who avail of these essential services who will lose out. We appeal to Government to work with us to fix this in the coming months.”
Increase in VAT Compensation Scheme for Charities
The Wheel welcomed the announcement that the VAT Compensation Scheme for charities will be increased from €10 million to €15 million.
Commenting, Dónall Geoghegan, Director of Policy and Advocacy, said, “The fact that VAT is paid by charities in Ireland is an anomaly in European terms. This move is a very positive step that will make it easier for many voluntary and charitable organisations to provide essential services and support to people who need it most.
“The Wheel has consistently campaigned on this, and we’re very pleased that Government has made this significant change. We welcome the Tánaiste’s recognition of the vital contribution that charities make to Irish society, and we credit him for listening closely to us and making real progress that will pay off for so many people.”
The Government introduced the VAT Compensation Scheme in 2018. Capped at €10 million since Budget 2024, the annual fund rebates only approximately one quarter of total charity VAT expenditure.