Tuesday 23 January 2018

Seven questions for your candidates that could mean more money for you

With the campaign for the General Election in full swing, now is the time to let your local politicians know what has you most out of pocket
With the campaign for the General Election in full swing, now is the time to let your local politicians know what has you most out of pocket
Louise McBride

Louise McBride

With the campaign for the General Election in full swing, now is the time to let your local politicians know what has you most out of pocket. Here are seven of the worst financial blows to have hit us since austerity budgets kicked in almost seven years ago - and which would be worth asking your politician to change.

Average earners stung for the top rate of tax

Back in 2008, a single person could earn €35,400 before getting hit with the top rate of income tax. This was above the average wage at the time.

The amount you can earn before paying the higher rate of tax has been chopped since - and it now stands at just €33,800. This is below the average wage - which currently stands at about €36,000.

So Irish people are getting stung for the top rate of tax incredibly early - and a lot earlier than many of our European peers.

Finance Minister Michael Noonan plans to abolish the controversial Universal Social Charge (USC) by 2020 if Fine Gael is re-elected. The recent cuts to the USC have been welcome - as will any moves to abolish it. But we should also be able to earn a lot more money before paying the top rate of tax.

Property tax

The property tax, which was introduced in 2013, hasn't been met with the same resistance as water charges have. Yet for many people, the annual property tax dwarfs their bills for water.

The property tax for an average home in south Dublin city, for example, is €585, while a typical property in south County Dublin attracts an annual property tax of €945.

In many parts of the country, the average asking price for a home is more than €150,000. The least you can expect to pay in property tax on such a home is €315.

By comparison, water charges are currently capped at €260 a year for a family and the €100 water conservation grant brings that annual bill down to €160.

The property tax has also been particularly unfair to those who stumped up tens of thousands of euro in stamp duty when buying a home before that duty was chopped in December 2010.

Lost tax breaks

A raft of tax breaks, 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.

One of the most valuable tax breaks was the relief on medical expenses. Before 2009, you could claim back 41pc of the cost of certain medical expenses in tax relief.

That tax relief was reduced to 20pc in 2009 and it has remained at that rate since.

An individual who spends about €1,000 a year on medical bills is losing out on €210 in tax relief a year as a result.

Help with mortgage bills

Mortgage interest relief, which reduces the burden of mortgage interest on borrowers, 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. The relief is most valuable to those with expensive standard variable mortgages.

Before spending years introducing legislation to give the Central Bank powers to cap mortgage interest rates (should the new government decide to do that), why not backtrack on the plans to abolish this tax break first?

Lost social insurance perks

Seven years ago, your PRSI covered the cost of fillings, teeth cleaning, x-rays, extractions, root canal treatment and gum cleaning. However, this cover was pulled in Budget 2010 and since January 2010 your PRSI has only covered the cost of a dental check-up.

As dental bills can be expensive, the withdrawal of this cover has meant that many people can't afford basic dental treatment. Tell your politician that you want this benefit reinstated when he calls.

Inheritance tax

It is has become impossible for many chidren to inherit the family home tax-free. This is because the amount they can inherit tax-free from a parent has been slashed - from €542,544 in early 2009 to €225,000 in December 2012.

Finance Minister Michael Noonan increased the limit to €280,000 in his Budget last October. But many family homes, particularly those in Dublin, are worth more than €280,000.

Tax on maternity pay

At €230 a week, the State's maternity pay isn't enough to get by on. Despite this, since July 2013, mothers have had to pay tax on maternity pay - depending on how much they earn. This means working mums could lose more than €2,000 of their maternity benefit of €5,980 to tax.

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