WE’RE THREE DAYS out from Budget 2025 and while the final figures won’t be unveiled until Tuesday, leaders haven’t shied away from kite flying.
With a projected surplus of €8.6 billion, and Apple’s €14 billion on the way, some people are calling for yet another “giveaway Budget”.
Whether it be November, February, or somewhere in between, a general election is around the corner, and the reaction to this Budget may help or hinder the government’s performance at the polls.
Here’s what we know about it so far.
Finance Minister Jack Chambers last week poured cold water on speculation of a giveaway-Budget, telling reporters that the cost-of-living package won’t be as big as it was in recent years.
Chambers said that although the rate of inflation has reduced, household costs – particularly energy bills – are still high, and as such cost-of-living measures are required but at a reduced scale compared to previous years.
Harris has strongly indicated that some reforms to inheritance tax will be announced, labeling the current system “unfair”.
Currently, if a child inherits from a parent, they pay no tax on the first €335,000 and then they pay 33% capital acquisition tax on everything above that threshold.
Suggestions ahead of the budget are that this threshold is set to rise to €400,000.
There’s also been some talk about the Universal Social Charge (USC), with Tánaiste Micheál Martin indicating that cuts could be made – though he said nothing had been decided upon yet.
Fianna Fáil and Fine Gael ministers are in favour of cutting USC by 0.5%, which would be the same cut that was in last year’s budget.
The standard rate tax cut-off point may be increased by €2,000 , RTÉ News reported, so people could pay the lower 20% rate of income tax on earnings up to €44,000.
The Rent Tax Credit is almost certain to increase again this year, with Housing Minister Darragh O’Brien previously indicating that it could rise from €750 to €1,000 per person.
The Help to Buy scheme, which gives first-time buyers up to €30,000 of their tax back towards a deposit for a new-build home, is currently set to end next year. It’s understood that Housing Minister Darragh O’Brien is pushing for it to be extended as one of his key Budget priorities.
It’s also understood that he is looking for the €500,000 cap on home prices to be extended to expand eligibility for the scheme.
Health Minister Stephen Donnelly has stated that he would like to extend the free contraception scheme for women to include 16-year-old girls. At the moment, women and girls aged 17-35 are included in the scheme.
Green Party leader and Minister for Children Roderic O’Gorman has confirmed that the childcare budget for 2025 will be over €1.2 billion – almost double what it was four years ago when he entered the role. But don’t expect to see the cost of childcare to reduce any further as a result.
With a 25% cut in the average cost of childcare kicking in last month, further changes aren’t expected as part of this year’s Budget.
There have been strong indications that the double child benefit payment ahead of Christmas will go ahead again this year, with Social Protection Minister Heather Humphreys hailing it as “extremely popular”.
It’s also expected that Child Benefit will be increased by €10 to €150 a month.
We’ve also seen O’Gorman float the idea of a one-off €560 ‘baby boost’ payment for parents with new children, a proposal Humphreys has also backed as a “good idea”.
Whether this will be approved by Minister for Public Expenditure Paschal Donohoe remains to be seen.
Humphreys indicated last month that there will be no increase to the Jobseeker’s Allowance, which currently stands at €232, given that Ireland is at full employment.
The minister has said pensioners, carers and people with disabilities should be prioritised as part of this Budget.
It’s expected that the pension will increase by €12 a week, the same as in the last two years, but Humphreys is under pressure from her own Fine Gael party colleagues to raise it further by €20 a week.
For now it’s unclear if she will go that far.
Last year’s Budget saw the student contribution fee paid by college students cut by €1,000, bringing the cost of one year in university to €2,000. However, this was only as a once-off.
It’s expected that the contribution fee will be cut by €500 this year by Higher Education Minister Patrick O’Donovan on a permanent basis, bringing the cost of one year in university to €2,500 for those who don’t qualify for a grant.
It’s understood that an increase to the household threshold for the SUSI grant is also on the table alongside an increase to the maximum grant on offer.
O’Donovan is understood to also be pushing for changes that would allow students to earn an extra €10,000 outside of term time, without this impacting their eligibility for the SUSI grant.
In terms of housing for students, sources have indicated that O’Donovan is pushing to get access to some of the Housing for All budget for student accommodation.
No guarantees have been given, but the Taoiseach himself has said the USC surcharge on self-employed income is “unfinished business”, so watch this space.
There’s also been huge pressure from the hospitality sector for the 13.5% VAT rate to be cut to 9% as was the case during the pandemic, but it’s understood that this is unlikely.
While Enterprise Minister Peter Burke and many of his Fine Gael colleagues are in favour of such a move, Finance Minister Jack Chambers is less so and looks likely to put his foot down.
Plans proposed by the Green Party are currently being considered to extend free public transport to all children under the age of nine.
Currently, children under five years of age go free.
This month, the European Court of Justice ruled that Apple must cough up its unpaid taxes which, adjusted for inflation, amount to over €14 billion.
The public and opposition were quick to suggest a ream of ways the money could be used effectively – solving the housing crisis, expanding public transport infrastructure, giving everyone some pocket money.
The Taoiseach has warned not to expect short-term injections of cash from the tax, as the money will likely go towards the “future needs” of the country – although he didn’t specify which ones.
Simon Harris did hint however that there are “real possibilities here in relation to housing”. That said, even if the €14 billion won’t feature directly in the Budget next Tuesday, the fact that it’s coming down the tracks may give the government a slightly freer hand to up the ante in terms of one-off measures this time around.
To embed this post, copy the code below on your site
have your say