Explained: From diesel to cigarettes and alcohol - what Budget 2018 means for your pocket
- Price hike on cigarettes and sunbeds
- Minimum wage to rise
- Changes to tax system worth around €250 to the average worker
- €5 increase to weekly social welfare payments from March
After weeks of speculation and leaks Finance Minister Paschal Donohoe has revealed a Budget package of €1.2bn. Here is everything you need to know about how it will affect your pocket.
The entry point for higher rate of tax is to increase by €750. There have also been cuts to two rates of USC.
In total the changes are worth around €250 a year to the average worker.
Meanwhile for PAYE workers the threshold for the higher rate of income tax is to be raised by €750 from €33,800 to €34,550.
Mr Donohoe also announced that the 2.5pc USC rate is being reduced to 2pc and the 5pc USC rate is being dropped to 4.75pc.
The minimum wage is to increase to €9.55 from January.
Mr Donohoe said the ceiling for the new 2pc rate is being raised from €18,772 to €19,372 to ensure that full-time workers won't be hit with a higher rate of USC, which would wipe out any gains.
Pensions and social welfare payments
There will be a €5 increases to social welfare payments including pension, dole and disability allowance from last week of March 2018.
The Telephone Allowance is to be brought back at a rate of €2.50 per week.
Mr Donohoe also said there would be a €20 increase in the earnings disregard for the One Parent Family Payment and Jobseekers Transitional Scheme.
In addition, the threshold for the Family Income Supplement will rise by €10 a week for families with three children.
Meanwhile, stay at home parents are set to benefit by about €100 per year.
This is due to the increase in the home carer credit to €1,200 a year.
There is no increase to the cost of diesel following Budget 2018. There will also be no hike on carbon tax.
Minister Donohoe said housing is a priority for the Government as he outlined a number of measures to address the housing market. These include:
€750m to be made available for commercial investment in housing finance.
In a significant move stamp duty is to rise to 6pc with effect from midnight tonight. For land used for residential developments the Government is introducing a stamp duty refund scheme subject to certain conditions.
The planned vacant site levy for 2019 will now be 7pc – not the 3pc previously announced.
“The message to vacant site owners… you need to get on with developing your lands urgently," Minister Donohoe said.
Funding for homeless services will increase by €18m to over €116m.
€1.83bn is also being made available for additional housing delivery in 2018 - 3,800 new social homes next year 2018.
Housing Assistance Payment funding is to be increased by €149m in 2018, allowing an additional 17,000 household to be supported next year.
However Mortgage Interest Relief for boom-time buyers to be cut by 25pc in 2018.
The cost of a box of cigarettes will hit €12 for the first time, following a 50c increase. There is no increase to duty on alcohol, which Mr Donohoe has said he did not feel would raise revenue.
A 30 cent tax will be applied to the most sugary drinks on sale as part of the Government’s bid to tackle obesity.
Finance Minister Paschal Donohoe confirmed that the tax on drinks containing over eight grams of sugar per 100 ml will be introduced next year.
A reduced tax of of 20 cent will be applied to drinks that contain between five and eight grams of sugar per 100ml, Mr Donohoe told the Dáil.
The sugar tax will be introduced in April 2018 in conjunction with the UK and Northern Ireland. The move is subject to State aid approval and was agreed following a public consultation.
Mr Donohoe estimates that the tax will net the Exchequer €40m in a full year.
In his budget speech, Mr Donohoe announced plans to increase the VAT rate on sunbed services from 13.5 per cent to 23pc.
“This is in recognition of the clear evidence of a link between sunbeds and skin cancer, the most common form of cancer in Ireland,” Mr Donohoe said.
There is no increase to childcare subsidies introduced last year which came into effect in September. However, Minister Zappone has secured funding to close loopholes which will see around 20,000 three and four-year-olds benefit from additional free childcare.
Funding has been secured for the Early Childhood Care and Education Scheme (ECCE), increasing the average entitlement from 61 weeks to 76.
In education, 1,300 extra teaching posts have been announced for 2018, which will reduce pupil-teacher ratio to 26:1. Extra funding has also been made available for 1,000 additional special needs assistants.
Meanwhile the levy paid by employers toward National Training Fund is to be raised by 0.1pc next year and again in 2019 and 2020.
Health funding is to rise by just under 5pc, or €685m, bringing total funding to €15.3bn. This includes funding for 1,800 new frontline staff.
Additional funding is to be made available for the recruitment of 800 new gardaí next year.