Families face €2,000 hit in dirty dozen New Year hikes
Published 31/12/2011 | 08:57
FAMILIES will be hit for an average €2,000 in the New Year because of a raft of new levies and charges that kick in tomorrow.
A "dirty dozen" of price hikes and benefit cuts about to hit households are largely as a result of government decisions following the two-day Budget earlier this month.
The impact of the higher charges will be felt from tomorrow onward, as experts warned of further strains on family finances.
The wide range of hikes means everyone will feel some pain. The New Year brings extra taxes in the form of the controversial household charge, higher motor and carbon taxes, and a 2pc hike in VAT, which will hit all consumers.
A family with three children will be down €228 over the course of next year due to cuts in child benefit. A four-child family will lose €432.
Commuters and motorists will be hit by higher bus and rail fares, increased parking fees, tolls and petrol prices.
Home and motor insurance policies are set to rise with the imposition of a new 2pc levy on all non-health insurance policies.
An insurance levy and increased costs particularly in health insurance will also make many question whether they can afford to keep paying for cover.
Consumers' Association chairman Michael Kilcoyne said families were at breaking point when it came to their finances.
"Many families are not able to make ends meet any more. A large number of tax and other charges going up will impact on the whole economy. We are fast reaching a breaking point," he said.
Perhaps the most contentious of the new charges is the household charge -- with a campaign of disobedience already on the cards. New Year's Day will see 1.6 million homeowners becoming liable for the €100 charge.
Payments must be made before March 31. Those who opt for quarterly instalments will need to set up a direct debit mandate by February 29.
Households will also end up shelling out as the new 23pc rate of value added tax (VAT) takes effect from tomorrow.
The higher rate of VAT will be imposed on everything from toilet paper and shampoo to petrol, diesel and telecoms bills.
Accountants Ernst & Young have calculated that raising the rate by 2pc will cost the average household €500 a year, although Finance Minister Michael Noonan has disputed this figure.
Meanwhile, policy holders are expected to end up forking out as much as €400m on an insurance levy, which has been put in place to bulk up the reserves of Quinn Insurance. This comes on top of 3pc stamp duty already imposed on general insurance policies. The new levy will add around €20 to the annual cost of home and motor cover for a family.
On top of this comes a new round of health insurance price rises. Quinn has raised its prices by up to 22pc and Aviva's prices go up by 15pc in February. This means the cost of renewing cover for a family with two adults and two children will jump by €400 over a year.
VHI has pushed up the price of some of its corporate plans this month, with expectations that it will announce more rises for consumer plans in the next few weeks.
Families that need to buy a lot of medicines will have to cover the first €132 a month from tomorrow before they will be reimbursed by the State. This is up from €120.
And, whether you travel by bus, train, Luas or car, it is going to cost more to do so in 2012.
The annual cost of public transport is set to jump by €100, with fare rises coming into effect tomorrow on all Iarnrod Eireann, Dublin Bus, Bus Eireann and Luas services.
The increases range between 3pc and 15pc, with commuters in the capital hardest hit. Dublin Bus fares are jumping by 15pc. And railway station parking charges have jumped by €1 a day to €3.
Motorists will be hit with higher tolls on the M4 and M3 motorways from tomorrow, while all other tolls will go up due to the VAT rise. And taxing a car is set to spiral in cost with rises of up to €117 annually.
Hikes in transport charges will hit families with children who take a school bus. The cost of sending a student to college is also increasing, with the registration fee jumping by €250.
Home heating oil, liquid petroleum gas and natural gas are set to get dearer from May when a new higher rate of carbon tax will apply. A 1,000-litre tank will become €15 more expensive. A €50 septic tank charge also applies from the new year.
Savers will see the tax rate jumping from 27pc to 30pc.
At the same time, the fuel allowance for those on social welfare and the elderly is being cut back.