‘Petrol, Pensions And Pints ‘ – What Does Budget 2023 Mean For Your Pocket?

Finance Minister Paschal Donohoe has revealed the full details of Budget 2023 this afternoon, announcing once-off measures worth 4.1 billion euro accompanied by budgetary measures for 2023 worth €6.9bn bringing the total size of Budget 2023 to €11bn.

In addition there will be a further €300m in public service support measures funded from the Contingency Reserve Fund.

Paschal Donohoe also said that in drafting the budget, the government has a responsibility to “strike a delicate balance” between helping with the cost of living pressures, but also “not making them worse by adding fuel to the inflationary fire”.

Budget 2023 will total €11bn – Public Expenditure Minister Micheal McGrath and Finance Minister Paschal Donohoe outside the Dail on Budget day 27-09-2022

From petrol to pensions, here’s what Budget 2023 means for your pocket.

Cigarettes and alcohol

Cigarettes will see an increase of 50c applied from midnight tonight, with all tobacco related products increasing on a pro rata basis. No increase has been announced for the price of alcohol, however a 50c excise relief for independent cider producers was announced.

Fuel

The Minister announced a extension to the current excise reduction of 21 cents per litre of petrol, 16 cents per litre of diesel and 5.4 cents per litre in respect of marked gas oil and the 9% VAT rate for electricity and gas until February 28.

He said he will introduce the necessary financial resolutions in the Dail on Tuesday evening to give effect to these extensions.

Pension

Pensioners will receive one-off payments of up to €1,100 before the end of the year under a series of last minute social welfare spending measures.

A double payment of the €253 per week state pension will be paid twice in the coming months, once soon after the Budget and then again in December.

Pensioners in receipt of the Living Alone allowance will receive a separate €200 payment while those claiming the Fuel Allowance are in line for once-off €400 lump sum on top of their usual rate.

The Fuel Allowance scheme is extended to up to 80,000 people who currently do not qualify for the payment meaning approximately 450,000 people will be able to claim the welfare payment over the coming months.

Social Welfare payments

Social protection payment will increase by €12 per week.

From January, the qualifying income threshold for the fuel allowance will increase from €120 to €200.

“For over-70s specifically, I am increasing the weekly fuel allowance means limit to 500 euro for single people and 1,000 euro for couples,” Mr McGrath added.

Childcare costs will also be slashed by 25% for centres registered under the National Childcare Scheme.

The cost to the state will be some €121 million euro. The measure is set to save families up to €175 a month.

Mr McGrath also said a further €59m euro will be made to the core funding of the childcare sector.

The Student Contribution Fee will also be reduced by €500 for families earning between €62,000 and €100,00.

Income Tax

Mr Donohoe announced an income tax package worth 1.1 billion euro, saying one of his core objectives for this Budget is to “ensure that workers do not find themselves in a position where they pay more income tax solely because of inflation”.

The standard rate cut-off point will increase by 3,200 euro to 40,000 euro.

The main tax credits (personal, employee and earned income credit) will increase by 75 euro.

The home carer tax credit will rise by 100 euro to support stay-at-home parents.

Paschal Donohoe also said the Government will further assess introducing a third rate of income tax.

He said the Tax Strategy Group (TSG) had examined the impact of introducing a third rate and further analysis of its report will take place immediately and conclude before next year’s Summer Economic Statement is completed.

Mr Donohoe said: “This analysis will assist government in arriving at an informed decision in a timely manner.

“Were the government to opt for the introduction of a third rate of income tax, it would required considerable change to the system in both the Revenue Commissioners and payroll providers; changes that will need significant lead time to implement.

“We are advised this could be done for January 2024.

“As a result, my department will engage with the Revenue Commissioner on the necessary preparatory work, in advance of a policy decision being made by Government.”

USC

Paschal Donohoe announced an increase in the second USC rate band (2% rate) from 21,295 to 22,920 euro in line with the 80-cent-per-hour increase in the national minimum wage recently agreed by the Government.

He said this would ensure that full-time workers on the minimum wage will remain outside the top rates of Universal Social Charge (USC).

He also extended the concession for a further year that applies to those who have a medical card and earn less than 60,000 euro a year so that those individuals pay a reduced rate of USC.

Housing

Minister Donohoe said the Help-To-Buy scheme will continue at the current rates until the end of 2024.

He told the Dail that he will keep the scheme under review and will consider a number of recommendations made in a report on the scheme.

He also said he will introduce a new rent tax credit of 500 euro per year for renters.

“This measure, aimed at those who do not get any other housing supports, will apply for 2023 and subsequent years but I am providing that it may also be claimed in respect of rent paid in 2022,” Mr Donohoe said.

“Approximately 400,000 people are expected to benefit.”

Mr Donohoe said he will bring in a vacant homes tax to “increase the supply of homes for rent or purchase to meet demand”.

The tax will apply to residential properties which are occupied for less than 30 days in a 12-month period.

Health

Free GP care is to be extended to 430,000 more people which will see approximately 70,000 children aged six and seven become eligible for free doctor visits by the end of the year.

It’s also intended that around 360,000 adults and children in low-income homes will become eligible for a free GP visit card by April 1, 2023 depending on household income and number of dependants.

€10m has also been allocated for publicly funded IVF in 2023, including money to subsidise private IVF and the development of public cinics.

Hospitality Vat 

It was confirmed that the 9% VAT rate for the tourism and hospitality sector will continue until February next year.

Paschal Donohoe also announced that the government will cut the VAT on newspapers from January 1.

“This is in line with the Government’s commitment to support an independent press and the Future of Media Commission’s recommendation on this matter,” Mr Donohoe added.

He also said that the VAT on defibrillators will be removed from January.

Mr Donohoe said that the government will bring in its own windfall tax on energy companies if Ireland cannot be part of the EU measures that are currently underway.

“It is not fair for companies to earn excess profits from the current volatility in the market,” he added.

Excise duty will also be increased on a pack of 20 cigarettes by 50 cents.

Cost-of-living package

Public Expenditure Minister Micheal McGrath said the Government was delivering a budget against an “extraordinary backdrop of uncertainty and challenge”.

In his speech he told the Dail that many people were “genuinely worried about what lies ahead in the months to come”.

The Minister said the cost-of-living measures in the budget will help households and businesses telling the Dáil that supports for energy and other costs will be given to to public services, sports clubs, community and voluntary organisations.

It was confirmed that every household will receive energy credits totalling €600 paid across three instalments.

The first will be paid before Christmas while other other instalments will take place next year.

A lump sum of €400 will be made to those who receive the weekly fuel allowance before Christmas.

Those who receive a weekly social welfare payment will receive a once-off double payment next month. This will go to pensioners, carers, people on disability payments and jobseekers.

It was also confirmed that the normal Christmas bonus will be paid in early December.

Those in receipt of the Working Family Payment will get an additional lump sum of €500 in November.

A double child benefit payment worth €140 per child will be made in November.

Those in receipt of the Carer’s Support Grant will get a €500 payment in November, while a one off-payment of €200 will made to those in receipt of the Living Alone Allowance.

Students fees will be slashed by €1,000 euro, and a once-off double monthly payment for those who receive the SUSI grant.

The 20% reduction on transport fares will continue into next year.

The total cost of cost-of-living measures amounts to 2.2 billion euro, Mr McGrath said.

Finance Minister Paschal Donohoe concluded his speech on an “optimistic note” saying that despite the challenges facing the country he was “confident” that individual, families and businesses will continue to be supported.

“We know we have many risks,” Paschal Donohoe said. “Recent years have shown how quickly they can develop.

“And I know we need to do more, build more homes, continue to improve public services, respond with courage and resolution to our defining challenge of climate change, but we can and we will.”

As he commended Budget 2023 to the Dail, Mr Donohoe said many are looking at this budget today “for confidence, for help”.

“We can and we should be confident about our future. We know our citizens need help, we know our employers need help and this budget aims to give this help,” he added.

(Source – Donegal Democrat / Donegal Live – News – Lili Lonergan – 27/09/202)

Donegal TD outlines the local benefits of today’s €11 billion Budget

“This is a Budget of progressive and protective measures for all” – Minister McConalogue.

Minister for Agriculture, Food, and the Marine, Charlie McConalogue TD

Donegal TD and Minister for Agriculture, Food, and the Marine, Charlie McConalogue, has hailed today’s Budget as one designed to protect people, families, businesses, farmers, fishers, and jobs.

“Today the Government announced a package of €11bn for Budget 2023 including a €4.1bn cost of living package which will safeguard people from the cost of living shocks while strengthening public services. It is a Budget designed to protect people, families, businesses, farmers, fishers, and jobs.

“We want to help people deal with the cost-of-living crisis. This historic budget will increase social welfare support and put money in people’s pockets through tax cuts. It will mean investment in public services, and reduced childcare, education, and healthcare costs.

“For farmers, fishers, farm families, and our rural and coastal communities, I have delivered a €2.14bn Budget which is an increase of 13% from Budget 2022. This is a Budget of strong measures to help everyone in society.”

He outlined what he called some of the measures included in Budget 2023 which will help Donegal people:

Farming, fishing, and coastal communities:

Over €500m to fund the rollout of the new CAP Strategic Plan
More than €100m in supports for beef and sheep farmers
€10m in supports for the tillage sector
Support to offset high fertiliser prices through grant aid schemes for Multi-Species Swards and red Clover as well as new €8m Liming Scheme
Largest ever marine and coastal community budget

Education:

Reduction in primary schools Pupil Teacher Ratio to the historic level of 23:1
Free primary school books for all children
School transport contribution to costs of fuel for school buses €10m
Extra 686 SEN teachers supporting pupils with additional needs
Extra 1,194 special needs assistants bringing the total SNAs post to 20,368

Rent relief:

€1,000 Tax Credit for Renters (€500 per year)

Supporting businesses:

Supports to pay small businesses and farms 40% of the increase in gas and electricity bills, capped at €10k a month
Up to €2m for firms exporting and manufacturing with a plan to control energy costs

Electricity:

3 x €200 electricity credit for all households

Welfare:

Social welfare weekly rate increased by €12
Weekly welfare schemes double week
Fuel allowance €400 lump sum
Carer’s Support Grant €500 lump sum
Working Family Payment €500 lump sum
Child Benefit Double Payment
Christmas bonus
Living alone allowance €200 lump sum

Childcare:

25% reduction in average weekly fees worth up to €2,100 per year

He added this was “a challenging time” and this Budget is an important response.

(Source – Donegal Democrat / Donegal Live – News – Staff Reporter – 27/09/2022)

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