BY JOHN ELLIS, FINANCIAL ADVISOR

LAST week saw the ins and outs of Budget 2022 released.
A fiver here, a price hike there, much of it was covered in the media. But what about the nitty gritty? How will it actually affect you?
It really is imperative that we review our finances after every budget to see are we getting our entitlements.
Minister Donohoe said the Government was  conscious of the cost-of-living pressures that are confronting citizens and businesses saying:
“Budget 2022 meets the twin goals of investing in our future, of meeting the needs of today, while putting the public finances on a sustainable path”
When you review the recent budget some of the figures are as follows — €87.6 billion will be allocated for public expenditure.
On a larger scale there will be €69.2 billion for core current expenditure and €11.1 billion will be made available in 2022 under the National Development Plan.
Where will all this and other monies go?  Maybe we don’t know or don’t care!
But there are certain areas that need to be reviewed to make sure we are availing of all our  entitlements due to the  boost for all income tax payers as bands and credits rise.
The standard rate income tax band  widened by €1,500 and the personal tax credit, the employee tax credit and the income credit widened by €50 to keep pace with  cost-of-living increases.
The State Pension personal rate increased to €252.30  and the personal rate plus qualifying adult to €422 and €480.30 for those aged under and over age 66 respectively.
The Christmas bonus will be paid for 2021.
The national minimum wage increases  from €10.20  to €10.50 an hour.
The ceiling for the second USC rate band increased from €20,687 to €21,295 to prevent minimum wage earners from moving into the higher USC tax rate.
The exemption from the top rate of USC for all medical card holders and those over-70 earning less than €60,000 continues.
An income tax deduction amounting to 30 per cent of the cost of vouched expenses for heat, electricity and broadband in respect of those incurred while working from home, which will be formalised through the Finance Bill. (Seemingly very few avail of these credits.)
And for businesses over €60 million is being made available to continue the commercial rates waiver which finished in September.
In Jim Power of Aviva’s commentary, he states: “The Employer Wage Subsidy Scheme (EWSS) remains in place in a graduated form until April 30. There will be no change to EWSS for the months of October and November; businesses availing of the EWSS on December 31, 2021 will continue to be supported until April 30, 2022; across December, January and February, a two-rate structure of €151.50 and €203 will apply; for March and April 2022, the final two months of the scheme, a flat rate subsidy of €100 will be put in place. The reduced rate of Employers’ PRSI will no longer apply for these two months; and the scheme will close to new employers from the 1st of January 2022.”
There was no change to the pension landscape but adjustments are  expected to feature in the upcoming Finance Bill which is due to be published at the end of this month.
According to Standard Life: “Following on from the Government’s proposals to reform and simplify the pensions landscape, we understand that measures specifically relating to PRSAs and AMRFs will be addressed in the Finance Bill, which is due to be published on or around October 21.”
And in the recent Pensions Commission report  the commission  states: “it has been unambiguously established that the current State pension system is not sustainable into the future and that change is needed.”
But no decision will be made on these recommendations until March 2022 “with a view to bringing a recommended response and implementation plan to Government, by the end of March 2022”.
In relation to the State Pension Age, the report recommended freezing the State Pension Age at 66 until 2028. It would then rise by three months a year so that it reached 67 in 2031, and by three months every two years thereafter to reach 68 in 2039.
For more on how to look after your money visit:
John@ellisfinancial.ie – 086 8362633

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