Thursday 26 April 2018

Charlie Weston: How litany of taxes, charges, and levies have hit families

MIDDLE-income families have been hit with €10,000 a year in additional taxes, levies and charges since the first austerity budget in 2008.

Ten new taxes, cuts in child benefit, the loss of the early childhood supplement, along with changes to income tax and hikes in valued added tax (VAT) have hit families hard, research by the Irish Independent shows.

Income tax changes alone have cost a married couple, with one income of €55,000 and two children, an extra €3,400 a year between 2008 and last year's Budget.

There have been changes to the tax credits – which are basically amounts of money you can earn before paying tax. And the pay related social insurance (PRSI) ceiling has been removed, while the tax bands have been altered.

But the biggest impact on incomes has come from the introduction of the universal social charge, which is up to 7pc for PAYE workers.

This is before yesterday's Budget changes.

And the move to hike the higher rate of VAT from 21pc to 23pc has meant an additional cost of €500 a year for the typical household, as this rate is applied to everything from washing powder to telephone bills.

The property tax and the other changes announced yesterday are expected to hit families for around €3,200 a year.

But there have been a raft of other changes in the six austerity budgets since the economic crisis struck in 2008 that are stripping money from households.

Health insurance has doubled in cost since 2008, with one of the reasons for this a succession of budgetary decisions to increase the cost of private beds in public hospitals. This has added at least €400 to the cost of health cover.

The introduction of carbon taxes on home-heating oil, domestic gas, petrol and diesel has also added to the costs of running a home. Gas and electricity have gone up by a combined €427 in the past few years, with much of this due to the austerity drive by Government.

Child benefit cuts have had a massive impact on the squeezed middle. The fall in the benefit from €166 in 2008 to €140 this year has cost a family with two children €600 a year.

And families lost the early childhood supplement which was worth €1,000 a year for each young child.

The removal mortgage tax relief for all homebuyers in 2009 has removed €900 from the budgets of a large chunk of the coping classes.

Homeowners have had a €100 household charge imposed.

Medical expense relief and services charges tax relief have been abolished.

On top of pay cuts and job losses, middle Ireland has had to contend with higher motor tax.

And changes to the drugs payments scheme have had a big impact for families that need to buy a lot of medication.

Irish Independent Supplement

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