Explainer: From childcare to the national debt - The 11 biggest changes made in Budget 2017
Published 11/10/2016 | 16:54
THE devil, as they say, is in the detail, and - despite all the leaks - there was a lot of information contained in the speeches of Finance Minister Michael Noonan and Public Expenditure Minister Paschal Donohoe.
Here are the most important changes of Budget 2017.
Tax - €335m allocated to cut three USC rates by 0.5 percentage points each. Will benefit low and middle-income earners.
First Time Buyers – Help-to-Buy Scheme. Will give first-time buyers a rebate of income tax paid over the previous four tax years up to a maximum of 5pc per cent of the purchase price of a new home up to a value of €400,000. Central Bank has agreed that rebate will be counted towards the deposit required for a home.
Tobacco – Excise duty on a pack of 20 cigarettes rises by 50 cents, with a pro-rata increase on other tobacco products.
Farmers – A special loan fund being established in conjunction with the Strategic Banking Corporation of Ireland to provide farmers with loans that have an interest rate below 3pc per annum. Will help improve cashflow and reduce cost of short-term borrowings.
Childcare – New single affordable childcare scheme from September 2017. Will provide means-tested subsidies for kids aged 6 months to 15 years, and universal subsidies for all children aged 6 months to 3 years old.
National Debt – The Government has decided to set a new debt to GDP ratio of 45pc and expects to reach it within a decade, depending on economic growth. The ratio will be at 76pc at the end of this year. After 2018, the Government will also set aside €1bn a year for a rainy day fund.
VAT – The reduced 9pc rate of VAT for some sectors such as the hotel industry, introduced in 2011, has been retained in light of the collapse of sterling, which makes it more expensive for Britons to holiday in Ireland.
Rent-a-Room – The tax-free income ceiling for the scheme has been boosted by €2,000 a year to €14,000. The Minister said it should increase availability of rooms, which would help third-level students.
Social Welfare and OAPs – From next March, an extra €5 a week in the carer’s allowance, disability allowance, and jobseeker’s benefit and allowance. And an extra €5 a week from March in the State pension.
Homeless – Increase of allocation for emergency accommodation for homeless people, by €28m to nearly €100m.
Sugar Tax - Will be introduced in April 2018. Consultation process to begin.