The state pension and other weekly social benefits will have to increase by more than €5 per week, according to the Tánaiste.

The 2022 budget was last year dubbed the “budget of five” with increases of €5 a week for pensioners, fuel allowances and welfare recipients.

However, Leo Varadkar has now said that due to the skyrocketing cost of living and the “good nickname” of the state of the economy, increases will need to be higher this year.

“We had the biggest social protection package for many years last year,” he said.

“But that was on the basis that inflation was hovering around 2-3pc. Inflation is currently hovering around 7-8pc.

“I think it stands to reason that pension increases and the social protection package will have to be bigger in 2023 than they were this year. That’s normal, the cost of living is going up and the economy is healthy.

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“Trade is breaking all records and public finances are pretty good.”

He told the National Economic Dialogue (NED) in Dublin that there “will of course have to be a substantial social protection and pension package beyond that of 2022” the “scale and details of which are yet to be determined”.

Mr Varadkar also said pensioners and welfare recipients are the “hardest hit by inflation”.

“People in rural areas are more affected than those in urban areas,” he said.

He told reporters the government was now focusing on cost-of-living measures for Budget Day and said some could start immediately “overnight” once announced in October.

“Now we want to focus on a budget day package. But these are measures that could come into effect almost immediately, the days following the October budget for example, and others that would then come into force next year.

“Many weekly rates can be increased by ministerial order (and this) does not require legislation to go through the Dáil, which can be done more quickly; tax measures, for example.

“Sometimes tax measures are based on [Budget night].”