BY JOHN ELLIS, FINANCIAL ADVISOR
Finance Minister Michael McGrath with Minister for Public Expenditure Pascal Donohoe have announced a €14 Billion Package with tax breaks, housing relief, and more. In this article I want to highlight some of the areas that have been affected in the Budget package which was aimed at providing significant relief to various sections of society. In other pages in the paper more details and commentary will be available.
The package encompasses tax breaks for workers, energy credits for households, and half-price travel for individuals under 25. These measures come in response to the challenges posed by rising inflation and interest rates.
A €2.3 billion cost-of-living package accompanied the budget announcement, including several one-off measures. Energy credits of €450, over three instalments of €150, will be provided to households between the end of this year and April next year. Additionally, double child benefits, Christmas bonuses for social welfare recipients, and lump-sum payments are part of the comprehensive cost-of-living measures.
The Budget addressed housing concerns by increasing the rent credit to €750 and offering tax relief for landlords at a standard rate of 20% on a portion of rental income. A temporary mortgage interest tax relief of up to €1,250 will be available to homeowners facing high-interest rates. Furthermore, the Help to Buy scheme has been extended to 2025, along with substantial funding for social housing development and renovation.
Taxpayers can expect to be around €800 better off due to Universal Social Charge (USC) reductions and adjustments to income tax bands. The top income tax rate is set to increase by €2,000 to €42,000, while the USC rate will drop to 4%, saving an average worker €235 annually. The national minimum wage will rise to €12.70 per hour.
All social welfare rates will see a €12 a week increase, with child benefit payments extended to 18-year-olds in full-time education. Public transport cuts of 20% are expected, and young adults aged 18 to 24 will benefit from half-price travel through the young adult Leap card. Significant investments are planned for public transportation infrastructure, including projects like MetroLink and Cork Commuter Rail.
The Budget aims to ease the financial burden on parents by reducing childcare fees by an average of 25% and extending parent benefits but not until September 2024. Students will experience a once-off student contribution fee reduction of €1,000. The budget also supports schools and third-level education with funding for free school books, copybooks, calculators, hot school meals, and additional special needs assistant roles.
The health service is set to receive an extra €500 million to tackle waiting lists and enhance mental health services. In addressing crime, funding will increase for Garda overtime and the recruitment of new personnel. Various other measures include VAT reductions on audio books and e-books, provisions for craft apprenticeships, and improvements to rural and community development.
Regarding climate issues it has been decided to double the relief for income received by households who sell residual electricity back to the grid. Zero Vat rate on supply and installation of solar panels will be extended to schools from January 1 next year with €380m provided for community and residential energy schemes to reduce greenhouse gas emissions and energy bills.
The Budget package addresses somewhat crucial aspects of Irish society, providing some relief and support to individuals and businesses during these challenging times. The focus on cost of living, housing, education, healthcare, and social welfare underscores the Government’s commitment to address the diverse needs of the Irish people.