Future Ireland Fund to cover pension and healthcare costs will be topped up to €8bn

The FIF is being set aside to pay for the likes of pensions and healthcare after 2040 and is expected to reach €100bn by 2035.

Finance Minister Jack Chambers is understood to be preparing to make a second major payment into the fund.

The FIF was launched with €4bn from the old rainy day fund, known as the National Reserve Fund, and is to be topped up by annual payments of 0.8pc of gross domestic product (GDP), a proxy for the size of the economy.

The funds are coming from bumper corporation tax receipts. The Department of Finance believes around half of Ireland’s corporation tax receipts are “windfall” in nature, meaning they are unexplained and may not be repeated.

The idea is to save that money for the future when the cost of running the State is expected to grow as a result of an aging population.

For each year from 2024 to 2035, 0.8pc of GDP will be invested in the fund. The FIF is one of two funds to manage the tax windfall. The second fund, known as the Infrastructure, Climate and Nature Fund, will be created by setting aside €2bn per year for a total of up to €14bn. Unlike FIF, the infrastructure and climate fund can be spent from 2026.

Meanwhile, the Government is moving to try to avoid a repeat of the backlash it got from the business community earlier in the year as a result of a raft of measures including pension auto-enrolment, minimum wage hikes and increased red tape.

Enterprise Minister Peter Burke has developed what is described as an enhanced SME test which will be applied to all memos going to government.

The move aims to manage the red tape and regulatory burden on small and medium-sized businesses and looks to improve the application of the SME test undertaken.

If a test is not included with a memo, an explanation as to why an analysis is not required must be included.

These new guidelines will apply to all primary and secondary legislative proposals as well as all policies introduced by agencies.

The SME test examines how new measures set to be introduced will impact small and medium enterprises.

It also seeks to identify potential disproportionate impacts and requires departments to propose alternative policy options to mitigate the impact.

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