2018 Budget – Just the Facts

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Today saw the unveiling of the 2018 Budget and with it a number of positive changes.

Finance and Public Expenditure Minister Paschal Donoghue has announced that this year’s €1.2 billion Budget Day package would ‘build on progress that would have seemed impossible only a few short years ago’, indicating an effort to put money back into the pockets of Irish citizens.

Read on for a round-up of the main facts about the upcoming 2018 Budget.

Income Taxes and Social Welfare

The higher rate of income tax is to rise by €750 per annum next year, and the entry point for single earners will rise from €33,800 to €34,550. The lower USC rate will be reduced from 2.5% to 2%, while the higher rate will be reduced from 5% to 4.75%. Interestingly, USC may be on its last legs as a working group is being set up ‘to plan, over the coming year, the process of amalgamating USC and PRSI over the medium term’.

Earned income recipients can expect an additional €200 per year, an increase that will benefit more than 147,000 self-employed individuals across the country. The home carer credit will also see an increase of €100, raising the value of the credit up to a possible €1,200 per annum.

From March 2018, all weekly social welfare payments will receive a €5 increase, and all social welfare recipients will receive the 85% Christmas bonus payment this year. Recipients of the One Parent Family Payment and Jobseekers’ Transitional Scheme will also see a €20 per week increase starting from March.

Tackling the Housing Crisis

The Housing Crisis is understandably one of the focus points for the Budget, and over the next year we can expect to see 3,800 new social homes built by local authorities and approved housing bodies, while the Housing Assistance Payment scheme will receive a €149 million boost. Similarly, an extra €500 million will be added to the direct building programme, and up to €750 million from the Ireland Strategic Investment Fund will be set aside for commercial investment in housing finance.

Funding for homeless services such as emergency accommodation will be increased by an additional €18 million next year to reach a total of €116 million per annum. Hopefully it will be enough to combat the current Housing Crisis and reduce the number of homeless people sadly sleeping on the streets.

Helping with Healthcare

Medical card holders under the age of 70 will be happy to know that prescription charges are due to be reduced from €2.50 to €2 per item, with a cap of €20. The excise duty on a pack of 20 cigarettes is to rise by 50 cents, and a pro-rata increase will be applied to all other tobacco products. The increase on cigarette excise duty starts from midnight tonight.

We’ll also see the long-awaited sugar tax spring into action next April, at a rate of 30 cent per litre on drinks that have more than 8 grams of sugar per 100 millilitres. Drinks with 5 to 8 grams of sugar per 100 millilitres will be reduced at a rate of 20 cent per litre.

The VAT rate on sunbed services will increase from 13.5% to 23%, which is a step in the right direction when you consider how sunbeds are linked with skin cancer.

Childcare and Education

The nation’s free pre-school program is scheduled for further development next year, and participants will receive the full two year service from September of next year.

An extra 1,300 teaching posts are to be added in 2018 in an attempt to reduce the pupil-teacher ratio to 26:1, and an increase of 1,000 Special Needs Assistants will see the total number of SNA posts rise to over 15,000 by next September.

You can find out more information by visiting the government’s Budget 2018 website.

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Posts from the Harvey Norman blog team.