As the days grow shorter and the cool breeze starts to grow it means that one thing is inevitable, a budget is on the way.
On Tuesday, 27 September 2022 Finance Minister Paschal Donohoe unveiled the Government’s much awaited cost of living Budget 2023. The Budget sets out an overall package of €11 billion. This is made up of once-off measures worth €4.1 billion and budgetary measures for 2023 of €6.9 billion.
The primary objective of Budget 2023 was to support struggling individuals, families and businesses through the coming months as inflation continues to affect all areas of the economy. The Government set out a range of budgetary measures with the aim to help the most vulnerable in society and support businesses and jobs both in the short-term and longer-term with the range of measures announced to ensure sustainable tax receipts and a strong economy into the future. With that in mind, let’s look at the key measures.
Personal Tax Changes
In order to relieve some of the burden individuals are facing due to increases in the cost of living, the government aimed to reduce the tax payable from the individual. These measures will put some money back in the pocket of taxpayers, which will contribute towards those increased costs of living.
- A significant increase in the Standard Rate Cut-Off Point to €40,000 so a single individual can now earn an additional €3,200 before paying tax at 40%. This results in a direct tax saving of €640, this is the highest single increase in rate bands in over a decade.
- There is also an increase to the personal tax credit, employee PAYE and the earned income tax credits by €75.
- Second USC rate band (2% rate) will rise from €21,295 to €22,920.
- €600 in electricity credits for all households to be paid in three instalments of €200.
- The maximum rate of all weekly social welfare payments will increase by €12 with proportional increases for qualified adults and people on reduced rates of payment.
- People aged 25 and under who are getting a reduced rate of Jobseeker’s Allowance will get the full €12 increase.
- A Christmas Bonus of 100% will be paid in early December 2022 to people getting a long-term social welfare payment.
- A once-off double Child Benefit payment will be paid (November 2022). This means you will get an extra €140 per child in November.
- People getting Fuel Allowance will get a once-off payment of €400.
- Disablement Benefit and half-rate Carer’s Allowance will be disregarded in the means test for Fuel Allowance.
- People getting Disability Allowance, Invalidity Pension or Blind Pension will get a once-off payment of €500
- Carers who qualify for the Carer’s Support Grant will get a once-off payment of €500.
- Domiciliary Care Allowance (DCA) will increase by €20.50 from €309.50 to €330 (January 2023). DCA will be available for babies who remain in an acute hospital after birth for a period of 6 months.
There were a number of measures announced with the goal to encourage residential development and keeping private landlords in the market.
- The Help to Buy scheme has been extended by two years and will now expire on 31 December 2024.
- Landlords will now be able to claim €10,000 (up from €5,000) per premises in respect of pre-letting expenses. The premises must now only be vacant for a period of six months to qualify (reduced from 12 months).
- A vacant homes tax will be introduced, which will apply to residential properties that are occupied for less than 30 days in a 12-month period. The tax will be charged at a rate equal to three times the property’s existing basic Local Property Tax rate. There will be exemptions if the property is vacant for “genuine reasons”
- A 10% levy will be applied to concrete blocks, pouring concrete, and certain other concrete products from 3 April 2023. The proceeds of this levy will be used to fund the MICA redress scheme.
- The stamp duty residential land rebate scheme has been extended to the end of 2025, was due to cease 31st December 2022.
Rent Tax Credit
If you are paying for private rented accommodation, you can claim a new Rent Tax Credit of €500 a year for 2022 and subsequent years. This tax credit applies to each tenant rather than each tenancy. For rent you pay in 2022, you will be able to claim this credit early in 2023.
- Free schoolbooks will be provided to all primary school children.
- Third-level fees will also be cut by €1,000 this year, a once off double payment for SUSI grant recipients, SUSI grants increasing by 10-14% and €1,000 increase to postgrad fee contribution grant.
- A reduction of 25 per cent in the weekly fee of those availing of the national childcare scheme is to be implemented.
- Funding for additional SNAs and teachers is to be increased. The student to teacher ratio will reduce for the third year in a row.
- €100 million will be provided for schools and school transport providers.
The Temporary Business Energy Support Scheme (TBESS) was introduced to support actively trading businesses with a refund of 40% on the increase in electricity and gas prices, subject to a monthly cap of €10,000 per trade (an overall cap will also apply on the total amount a business can claim).
A new longer-term low-cost loan of up to €500,000 for up to 10 years, to help Small and Medium Enterprises (SMEs) including farmers and fishers to expand or invest in sustainability or energy efficiency.
There will be a €7.50 increase on the current rate of Carbon Tax applied per tonne of carbon dioxide emission. This will bring the rate up to €48.50 per tonne. Carbon tax will increase by the same amount in every budget until 2029. The increase will be applied to petrol and auto diesel from midnight on budget night (i.e., from 27 September) and all other fuels on 1 May 2023.
- Public hospital in-patient fees will be removed for all patients from 1 April 2023..
- Free GP care extended to more than 400,000 people. This pledge includes, by the end of 2022, all children aged six and seven.
- Expanding free contraception from women aged 17 to 25 to all those aged 16 to 30 years.
- Providing financial support for access to IVF treatment.
- €1.2 billion will be used for mental health services
For more information on the Budget 2022 or to book a financial review, contact Alan Buckley om email@example.com