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A MASSIVE GIVEAWAY Budget was announced yesterday that included a major cost-of-living package, with a value of €2.2 billion, and a number of welcomed tax cuts.
Some once-off payments will be received before the end of the year while others will include backdated clauses. Others have already kicked in or were extended during yesterday’s announcement.
So, here’s what to expect in the year to come.
From 1 January, there will be an additional €12 to all weekly social welfare payments as well as double payments this month and at Christmas for long-term welfare recipients.
On the means-tested Carer’s Allowance, the means test disregard will increase to €625 for a single person and €1,250 for a couple from next year. Maternity, paternity, adoptive and parents’ payments increasing by €15, also from 1 January.
In November, a €400 payment will be made to those who receive the Carers Support Grant, Disability Allowance, the Blind Pension, Invalidity Pension and the Domiciliary Care Allowance.
St. Vincent DePaul welcomed the increases but said increased costs, such as energy, fuel, housing and childcare are “eroding” the money that recipients are left with.
“Households need to budget on a weekly basis and needed an adequate weekly increase in social welfare payments to reflect this,” Rose McGowan, SVP National President, said.
It was confirmed that two double child benefit payments will be made before Christmas and a €420 ‘baby boost’ scheme will be introduced for new parents after the birth of a child after 1 January.
The first double child benefit payment, which is paid monthly, will be made in November and the next will be paid out in December. Social Justice Ireland has taken issue with the fact that the base €140 rate was not increased for vulnerable and low-income families.
Unlike most of the other measures, increases in the excise duty on cigarettes came in at midnight. From today, the price of the most-popular packet of cigarettes is €18.05 after a €1 increase was announced yesterday. The excise duty hike is double the usual increase of 50c.
Increases kicked in, on a pro rata basis, for other tobacco products from midnight as well.
Separately, a tax on e-liquid – used in e-cigarettes and vapes – will be introduced in the middle of next year. The fee will be 50c for every millilitre of e-liquid. The delay with the introduction is to the challenges of introducing what’s essentially a new tax.
The average disposable e-cigarette has 2ml of e-liquid and costs €8. The introduction of the new tax will increase the cost to €9.23.
The Irish Heart Foundation and Vape Business Ireland, which represents vaping retailers, have welcomed both taxes.
The representative body said it helps improve oversight of the market but that it should be complemented with support measures to make sure vendors, who it says are normally SMEs, can stay in business.
The Heart Foundation said the fees will help to deter the growing number of young people from purchasing e-cigarettes without impacting existing users.
The Help-To-Buy scheme was extended until 2029 after it was due to conclude at the end of next year.
It supplies new homeowners a deposit for a newly-built house or apartment and it can also be granted on a once-off basis to applicants who are building their own home.
The rate of stamp duty applicable to residential property valued above €1.5 million has increase already to 6%. A higher rate of stamp duty on bulk acquisitions of houses increased from 10% to 15% with immediate effect after it was announced as well.
Separately, rent tax credits will increase to €1,000 per tenant next year, and it will be back dated to this year.
This means a couple who are renting a property can avail of €2,500 in total in rent supports. The rate credit was increased from €750.
Housing prevention charity Threshold has welcomed the housing measures but said it has concerns over the lack of funding for the HAP scheme, as rent prices “surpassed the HAP rates many years ago, HAP recipients are often having to make up the shortfall with money they do not have”.
The executive director of the Simon Communities, Wayne Stanley, said it was “extraordinary” that so much money could be expanded by Government this year but “so little done for those at the sharpest end of the housing crisis”.
Stanley also took issue with 10,000 social homes promised in this budget. “This is simply insufficient and we see another budget where the rhetoric of homelessness being a ‘top priority’ is not in evidence,” he said.
Speaking during a press conference yesterday, Minister for Housing Darragh O’Brien said he believed the Government have “never been found wanting when it comes to funding out housing”, but acknowledged that problems did remain.
Carbon taxes will increase the price of petrol and diesel on Wednesday next week, adding at least 2c increase to the price of fuel.
Kevin McPartland, CEO of Fuels for Ireland – the lobby group for garages like Applegreen, Circle K and Maxol – told The Journal that Ireland is now paying the highest amount for fuel in the EU and his group are calling for a review.
He added that the review could look at how Ireland can use fuel alternatives but should also determine the impact of the pricing.
“In truth, increases to the price of fuel does not have any impact – good or ill – on retailers,” McPartland said. He added that the only people who are impacted are consumers as garages rely on other revenue streams like newspaper and coffee sales.
The carbon tax increases are part of planned, incremental hikes to the use of fuel and other activities that emit CO2 into the atmosphere. Receipts go into climate action schemes but on Monday a report found 39% of the funds are not being spent correctly.
Elsewhere in transport, children under 9 will be allowed to use public transport for free from next year and those over the age of 70, who hold a commuter pass, will be allowed to have a companion join them free of charge.
For electric vehicles, benefit in kind (BIK) reliefs will remain in place, while an exemption from BIK tax for installing an electric vehicle charger will also be introduced from next year.
An amendment to vehicle registration tax will also be made next year, to ensure electric commercial vehicles can qualify for the €200 rate.
Padraic Deane, Publisher of the AutoTrade.ie, told The Journal that more investment needs to be put into charging networks for electric vehicles first, before measures to increase carbon taxes and give exemptions to EV owners are introduced.
“Their logic is again wrong,” Deane said, adding that higher taxes on cars need to be paired with better public transport systems and alternatives.
The reduced 9% VAT rate on gas and electricity will be extended until 30 April 2025. The cut was initially introduced to assist with the cost of living as energy prices increased in 2022 after the invasion of Ukraine.
Additionally, all households are to get a €125 energy credit this year and another next year. Eoin Clarke of Switcher.ie, a free energy company comparison website, says that energy prices are still very high and “nowhere near” prices seen before 2022.
In addition to the energy credits, a further €300 lump sum will be made to recipients of the fuel allowance this November.
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