College student fees to be cut by up to €500 in Budget 2026

Third-level student fees are likely to be permanently reduced by up to €500 in next month’s budget, but a senior Government minister has ruled out introducing a second tier of child benefit for lower income parents.

A permanent reduction in the student contribution for college is set to be introduced, senior Government sources have suggested, but negotiations for Budget 2026 remain ongoing.

It comes as social protection minister Dara Calleary confirmed on Sunday that a second tier of child benefit will not form part of the budget on October 7.

The second tier would have seen a higher monthly payment given to parents on low incomes or in instances where children were at risk of poverty.

There will instead be a push for double-digit increases to other welfare payments with child benefit to remain as a universal payment, paid equally to all parents regardless of wealth.

Ministers have been meeting with finance minister Paschal Donohoe and public expenditure minister Jack Chambers in recent weeks to discuss Budget 2026. It is expected that these talks will intensify this week as the Dáil returns.

The final weeks of the last Dáil term were dominated by the student fees issue following confirmation from higher education minister James Lawless that the €1,000 reduction would not be repeated, as it was a one-off measure.

The Government has insisted there will not be an additional cost-of-living package in the Budget.

It is understood that permanent changes to the student contribution fee and the Student Universal Support Ireland (Susi) grant levels will be sought but this is not expected to be the equivalent of the previous €1,000 cut.

Senior political sources suggested that there could be reductions of a “few hundred euro” or in the region of €500. The student contribution fee is currently €3,000 per year.

However, it was stressed that nothing has been finalised, with another source saying everything is on the table until negotiations conclude.

It is understood Mr Lawless is “mindful” that there has been “volatility” in recent years in the cost of third- level education, as previous cuts were temporary. Sources said this has caused anxiety for students and their parents.

Move towards 'sustainable' measures 

There is a desire now across Government to move away from temporary measures and instead introduce changes that are “permanent, sustainable, and provide certainty”.

It is also expected that targeted and increased Susi supports are being sought for families.

One source said that reductions in fees are in the programme for government and that “middle Ireland needs a break” from the hefty costs of sending a child to college.

Mr Calleary’s confirmation, meanwhile, that a second tier of child benefit will not be introduced came just a few days after Taoiseach Micheál Martin suggested that it would be. 

Mr Calleary said the child benefit system would need to be “completely rejigged” and this will not be possible by October 7. He said: 

We need to look at the supports already in place in addition to the universal child benefit.  

“We have the child support payment, which is paid in addition to child benefit to those on the lowest incomes.

“That work [on the second tier of child benefit] won’t be done [in time for the budget], but we are working on it with a view to bringing a proposal to Government at some stage," he told RTÉ.

Mr Calleary said he hopes a proposal for the second tier of child benefit will be completed in advance of Budget 2027.

Senior Government sources told the Irish Examiner the Taoiseach said a second tier of child benefit “or the equivalent” would be introduced in next month’s budget.

It is understood there will be a “push” to increase the child support payment and expand eligibility for the working family payment.    

Senior Government sources said that double-digit increases were required to “make a difference”.

When asked if the core child benefit rate could increase, one source said that the “focus is on targeted payments to those most at risk of poverty”.