ON Tuesday, the country will be hit with its seventh austerity Budget – about five years since the first hairshirt Budget dug its claws into us.
As the last six Budgets have lashed us with massive tax hikes, cuts to social welfare and chops to public service jobs and pay, it's hard to see where Finance Minister Michael Noonan can squeeze another €2.5bn out of us.
The last five years of austerity could easily have taken more than €84,000 out of your pocket, according to a round-up by the Sunday Independent of some of the worst austerity Budget blows.
SNEAKY TAXES €16,000 BLOW
If you're on an average wage of €36,200, you've coughed up almost €16,000 in tax levies and PRSI since the first austerity budget kicked in, according to Christine Kiely, head of direct taxes with the tax refund specialists, Taxback.com.
Before the first austerity budget in 2009, most taxpayers paid a health levy. Budget 2009 introduced a new levy – an income levy. Like the health levy, this levy was paid on top of your income tax.
The late Finance Minister, Brian Lenihan, doubled the income levy and health levy in the mini-Budget of April 2009. In Budget 2011, Lenihan abolished both levies – and replaced them with the universal social charge.
When you combine the universal social charge with Pay Related Social Insurance (PRSI), anyone paying the higher rate of income tax is now paying more than half of their wages on tax.
If you're earning €36,200, you're coughing up €3,301 in levies and PRSI today – €1,393 more than you did in 2008, according to Kiely. Over the last five years, you have paid a total of €15,727 in tax levies and PRSI.
"The introduction of the income levy in 2009 and the almost immediate doubling of the rates in May 2009 probably goes down as one of the harshest hits of the austerity budgets," says Kiely.
Taxpayers have also been hit hard by the abolishment of the PRSI-free allowance in Budget 2013. This allowance allowed taxpayers to earn up to €127 a week without incurring PRSI. "The removal of the PRSI exemption was particularly tough for those on lower incomes as the monthly effect of this on an employee earning €36,200 was the same as for an individual earning €60,000," says Kiely.
Big earners have also been hit hard by the tinkering with PRSI.
If you're earning €100,000, you're paying €4,000 in PRSI today – almost €1,200 more than you paid in 2008, according to Jim Ryan, tax partner with Ernst & Young.
PROPERTY TAXES €1,267 BLOW
In 2009, Lenihan hit owners of holiday homes or investment properties with a €200 annual charge. This charge – known as the Non Principal Private Residence (NPPR) charge – will be abolished next year and replaced with the property tax.
Over the last five years, the NPPR has taken €1,000 out of the pockets of an individual who owns a second property – more if they have more than two properties under their belt or if they didn't pay the NPPR on time.
In 2012, the precursor to the local property tax – the €100 annual household charge – kicked in.
Since then, the charge has been replaced by the property tax.
Last year, property owners paid a half-yearly property tax. Next year, property owners will be hit with the full rate. The cost of the tax will be between €90 and €1,755 next year, depending on the value of the property. Owners of properties worth more than €1m will pay more.
The average asking price for a property today is €190,790, according to myhome.ie's latest property barometer. If you own a property of that value, you'll have coughed up €167 in property tax last year. Add in the €100 household charge paid in 2012, and you've already paid €267 in property tax over the last two years. Furthermore, as you'll be hit with the full property tax rate in 2014, you can expect to pay €315 in property tax next year.
CHILDCARE €22,000 BLOW FOR A FAMILY OF SIX
In Budget 2006, the then Finance Minister, Brian Cowen, introduced an early childcare supplement of €1,000 a year for children up to the age of six. This payment aimed to alleviate the cost of childcare for parents.
In Budget 2008, Cowen increased the supplement to €1,100 a year. As it was paid for each child under six, it was worth €4,400 a year to parents with four children under the age of six.
Within a year of Budget 2008, Cowen's successor, Lenihan, moved to curtail the supplement. By the end of 2009, the payment had been scrapped. Had that supplement stayed in place, over the last five years, it would have been worth €22,000 to a family with four children under the age of six.
CHILD BENEFIT €12,500 BLOW FOR A FAMILY OF SIX
In the last of the giveaway Budgets, Cowen increased child benefit payments by about 4 per cent. This meant that in 2008, a family with four children could pocket €738 a month – or €8,856 a year – in child benefit.
The child benefit cuts of the austerity years have chopped child benefit for a family with four children by almost 30 per cent to €530 a month – or €6,360 a year. This means that a family of six will get about €2,500 a year less in child benefit than they did in 2008.
Had the rates stayed the same since 2008, that family would have been €12,500 richer over the last five years.
FIRST-TIME BUYERS €31,500 BLOW
Although the interest charged on mortgages today is a multiple of what it was before the austerity programmes kicked in, you usually won't get any tax relief on your mortgage interest unless you took out a mortgage before the end of last year. Furthermore, mortgage interest relief will be abolished for good by the end of 2017.
As mortgage interest relief usually gives first-time buyers back between a fifth and a quarter of the interest paid on their mortgage (up to certain limits), it is worth thousands of euro a year to borrowers.
For example, a first-time buyer married couple who took out a mortgage in 2011 were eligible for up €5,000 in mortgage interest relief a year for the first two years of their mortgage; €4,500 a year for the third, fourth and fifth years of their mortgage; and €4,000 a year for the sixth and seventh years of their mortgage – as long as those years don't fall before mortgage interest relief is abolished at the end of 2017.
This means the relief is worth as much as €31,500 to a first-time buyer.
TAX RELIEFS BLOW RUNNING INTO THE €1,000s
A raft of other personal tax reliefs, such as the reliefs on trade union subscriptions, bin charges and medical expenses, have been either abolished or curtailed since the first austerity Budget.
These reliefs were worth hundreds – if not thousands – of euro to taxpayers.
Before 2009, for example, you could claim back 41 per cent of the cost of certain medical expenses in tax relief. That tax relief was reduced to 20 per cent in 2009 and it has remained at that rate since.
So if you paid €3,000 on laser eye surgery in 2008, you could have claimed back €1,230 in medical expenses tax relief that year. But you'll only qualify for €600 in tax relief on such a bill today.