Funding of €1.2 billion has been allocated in the Budget for a public sector pay deal.
The money will be used to address all elements of both the last public service agreement, which expired at the end of June, and any successor pay deal in 2027.
“This includes the cost of any associated pension impacts,” according to the Department of Public Expenditure.
Since last week, workers across the public sector have been engaging in industrial action in the form of a work-to-rule ahead of planned strikes on 14 October and 21 October.
Unions have accused the Government of failing to make meaningful commitments on pay following the expiration of the last public sector agreement.
In his Budget speech, Minister for Public Expenditure Jack Chambers made reference to the current industrial action and said every effort should be made to avoid further disruption.
“I have made significant provision in today’s Budget package for public service pay,” Mr Chambers said.
“This demonstrates my seriousness, and indeed the seriousness of Government, in our desire to reach a new agreement that responds to the issues that have been raised.”
“I would now call on ICTU and other associations to match this intent by re-engaging as a matter of urgency and standing down the ongoing industrial action,” he added.
However, public sector unions said the €1.2bn allocated is not enough to resolve the current dispute.
“The Government has demonstrated fiscal capacity elsewhere in the Budget but has apparently not allocated enough to resolve a pay dispute that is now escalating,” according to a statement from the Public Services Committee of Irish Congress of Trade Unions.
“Union members are unlikely to be persuaded by the minister’s call on unions to enter talks, while the provision of €1.2bn does not suggest the Government is prepared to negotiate a deal that workers could consider credible in current circumstances,” the unions said.
Read more: Latest Budget 2027 stories
Meanwhile, a coalition of community and voluntary organisations said any increase in public sector pay must also include the 40,000 workers that it represents.
A pay agreement reached at the Workplace Relations Commission last year included an automatic link to all future public sector pay deals for community and voluntary sector workers.
“This is necessary to recruit and retain essential staff for vital health, social and community care services on behalf of the State to hundreds of thousands of often marginalised people and families,” the Coalition of Community and Voluntary Service Providers said.
“It should form part of a new sustainable funding model for our sector as partners with Government, to deliver innovative, efficient and compassionate supports and services, now more vital in view of current inflationary and international pressures on our economy and society,” it added.
The minister also announced changes to the minimum wage, which he said would see a single person with a net income of €26,000 see a 5% increase in their income next year.
IBEC CEO Danny McCoy said that there are positives to take from the rise in minimum wage, despite it being a “chunky” increase.
Speaking on RTÉ’s Drivetime programme, Mr McCoy said: “That’s about almost double of what most businesses will be forecasting for wage growth.
“Even in the context of the €10 for social welfare on a €300 pension, that’s 3%.
“5.6% is a very chunky percentage increase, particularly in terms of wage setting and norms in the economy.
“But there is some positive in that that they’re now going to use the PRSI system to try to offset some of those costs for businesses because it’s business that pays the minimum wage, it’s not the Government.
“A lot of businesses won’t be able to afford a 5.6% increase.
“There will be a lot of tension in the SME community over the scale of this minimum wage adjustment,” Mr McCoy added.
Measures announced are far from ‘workers’ budget’ that was promised – ICTU
The Irish Congress of Trade Unions (ICTU) has branded the Budget a “half-hearted apology” for last year’s budget.
ICTU said the measures announced are far from the “workers’ budget” that was promised.
“A commitment to a 79c increase, as recommended by the Low Pay Commission, is the least Government could do at a time of cost-of-living pressures,” said Owen Reidy, General Secretary, ICTU.
“We note with concern reports that the Government may break an already broken promise on the living wage, kicking the can further down the road,” Mr Reidy said.
SIPTU General Secretary John King described Budget 2027 as “a chaotic budget providing little relief for workers”.
“We are still unsure whether the Government, despite accepting the Low Pay Commission’s proposed 79 cent increase in the minimum wage, will again postpone the target date for their own living wage beyond 2029,” Mr King said.
The National Youth Council of Ireland (NYCI) described Budget 2027 as “a tone-deaf response to the reality facing young people in Ireland”.
“An increase in the minimum wage to €14.94 is welcome but Government cannot recognise the importance of protecting low-paid workers from inadequate incomes while continuing to allow young workers to be paid less simply because of their age,” said NYCI Director of Policy and Advocacy Kathryn Walsh.
“Abolishing sub-minimum rates can be done outside the Budget cycle. Government must do this without delay,” added Ms Walsh.
