Donnelly is a member of the JointOireachtasCommittee on Finance, Public Expenditure and Reform and part of the Irish delegation to the Parliamentary Assembly of the Organization for Security and Co-operation in Europe. In October 2012, he addressed Martin Schulz, President of the European Parliament, in Dáil Éireann, on behalf of the technical group, saying: "€67 billion is being borrowed from the troika, virtually all of which is going into the banks and almost the same amount is being given by the banks to the senior bondholders in terms of forgone losses. This is what has happened: there has been a €67 billion circle of money from the troika through Ireland to the international banks and investors… I thank Mr. Schulz for his support and I hope he will be able to bring this simple message back: Ireland did not get a bailout and Ireland is not looking for aid or benevolence. We need our money back in order that we can contribute to the recovery of Europe." Miriam Lord of The Irish Times made Donnelly her 2012 Politician of the Year, owing to his contributions on the post-2008 Irish banking crisis.
Independent and Social Democrats
Stephen Donnelly entered political life being elected as an Independent TD at the 2011 general election. On 15 July 2015, Donnelly launched the Social Democrats, becoming co-leader along with former Labour Party TD Róisín Shortall and former Independent TD Catherine Murphy. Donnelly left the party on 5 September 2016, citing difficulty in working with his two co-leaders. After leaving the Social Democrats, Donnelly spent the next five months as an Independent TD again for Wicklow.
Fianna Fáil
In February 2017, Donnelly announced that he was joining Fianna Fáil. Upon joining, Donnelly said that he believed Fianna Fáil to be "the best team that most closely align with my politics who I believe are taking these challenges very seriously". During a 2017 radio interview Donnelly was questioned about a previous newspaper column, in which, after paraphrasing an unnamed person about Fianna Fáil's perceived problems and "lack of accountability", Donnelly wrote that he "hate it when the cynics are right". Donnelly initially said that he did not know where the host was quoting from - later stating: "I stand corrected". He was appointed party spokesperson for Brexit. In a Front-Bench reshuffle in March 2018 he was appointed Fianna Fáil spokesperson on Health. Donnelly was elected to the 33rd Dail in the 2020 Irish general election, although he won less votes than when he stood with the Social Democrats three years prior. As part of the coalition government of the 33rd Dáil, Donnelly was appointed Minister for Health by Taoiseach Micheál Martin on 27 June 2020.
Drug laws
In a 2017 interview with Hot Press magazine, Donnelly spoke about smoking cannabis and use of other drugs. When asked whether he had taken drugs other than cannabis, Donnelly responded: "I have but that's all the detail I'm going to go into". After being announced as a minister in the 2020 cabinet, Donnelly reportedly stood by his 2017 comments, and noted an openness to the liberalisation of some drug laws, stating that if "you're doing something that's not harming anybody else, it's hard to see a legitimate role for the State in prosecuting you for it". A 2020 news article described Donnelly as "broadly supportive" of supervised injection centres.