Budget 2023: How possible measures could impact people earning under €60,000 a year

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As the nation faces a winter of discontent with soaring energy, food and other costs, Taoiseach Micheál Martin has promised there will be “substantial supports” announced in the upcoming Budget on September 27 to help people cope with rocketing inflation.

his year’s Budget will be a two-pronged approach. The Budget package itself will cost €6.7bn while a separate once-off cost-of-living package is expected to cost more than €1.5bn.

So what is in store for families and individuals earning under €60,000 a year?

Tax Cuts

Tax cuts that would cost a total of €1.8bn are being considered by the Government.

Ministers are considering increasing standard income rate bands by €2,500 and an increase in personal tax credits of €100 for single people to €1,800 and a €200 increase for married people to €3,600.

The PAYE credit may also be raised by €100, from €1,700 to €1,800.

Tánaiste Leo Varadkar has promised tax cuts that would help “squeezed” middle-income earners the most. However, whether the Government will deliver on his proposal for a middle-income tax rate of 30pc remains to be seen on Budget Day.

“The most important thing is that middle-income people will see a substantial reduction in the amount of income tax they pay,” Mr Varadkar said earlier this month.

Increase in Minimum Wage and Sick Leave

The national minimum wage will increase by 80c an hour to €11.30 from January 1, 2023, which would put an extra €1,600 into the pockets of those working full time on the minimum wage next year. 

Mr Varadkar said such an increase would be greater than any increases to social welfare rates in the Budget.

He also said a new law on sick leave, entitling almost all workers in the State to sick pay of up to €110 per day, would come into effect in 2023. However, unions have criticised differing the new law until next year which was initially planned to come into effect this month.

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Petrol and diesel prices are way up compared with last year.

Petrol and Diesel Costs

The Government is considering extending the cut on excise duty of 9pc on petrol and diesel that is due to expire at the end of this year for another six months to help offset soaring fuel costs.

Energy Bills

The Cabinet was warned that families could face astronomical annual bills of €6,000 a year for gas and electricity next year, a hike of approximately €2,000 for the average householder who is currently paying around €1,800 a year for gas and €2,200 for electricity.

Ministers are considering an energy credit of €200 applied directly to bills that would be paid out three times a year to prevent many families from experiencing fuel poverty.

Taoiseach Micheál Martin has said he favours more direct support for householders to cover their energy bills rather than bringing in a UK-style cap on prices or a windfall tax on company profits.

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Transport fares were cut last year and could fall further or stay the same

Public Transport

Public transport fares were cut by 20pc earlier this year as part of the first cost-of-living package and it appears the reduction will stay in place or be reduced further in the Budget.

Education

Fees for third-level students could be reduced by up to €250 a year for students paying €3,000 a year in college fees.

Social Welfare

Ministers are considering a once-off doubling of the child benefit payment that would provide an additional €280 payment for one child, €560 for two children and €840 for three children.

They are also considering a once-off doubling of social welfare and working family payments and a €100 lump-sum payment for fuel allowance recipients as well as an anticipated increase of around €15 a week in social welfare payments.

Also under consideration is a once-off double payment of the state pension, jobseeker’s allowance, carer’s allowance and disability payments that would likely be paid out alongside the annual Christmas bonus payment for all social welfare recipients.

Landlords and Renters

As many landlords exit the rental market and with soaring house prices exacerbating the housing crisis, the Government is considering reducing the amount of tax that landlords pay on their rental incomes.

The Government is also considering a tax credit for renters.

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