BUDGET 2018: Here’s what the budget will mean to you and your family
The Minister for Finance, Paschal Donohoe has today announced the Budget for 2018.
Addressing Dail Eireann, the Minister said the budget will amount to €60.9 billion this year, or €12.7k per person.
Capital spend will be €5.3 billion, up €790 million from 2017, while tax reductions on income will amount to €335 million.
Social Welfare payments
All social welfare payments will see an increase of €5 from the end of March 2018. These payments include Disability and Carer’s Allowance, and both Jobseeker’s payments.
The State Pension will also see a €5 increase, while the Christmas Bonus scheme will be increased to 85% of a weekly payment.
Those in receipt of the One Parent Family Payment and the Jobseeker’s Transitional payment will also see an increase of the earnings disregard of €20, meanwhile, the threshold for receipt of the Family Income Supplement will increase by €10 per week for families up to three children.
The Qualified Child Payment will be increased by €2, while a new telephone allowance of €2.50 per week for those in receipt of both the Living Alone Allowance and the Fuel Allowance will also be introduced.
TAX
Mortgage interest relief will gradually be reduced over the coming years. It will remain at 75% next year, before being cut to 50% and then 25% in the following two years.
The entry point for single earners is to be increased from €33,800 to €34,550.
As for USC, the 2.5% rate will be reduced to 2% and the 5% rate will be reduced to 4.75%, which will reduce the top marginal rate of tax income up to €70,044 to 48.75%.
The Home Carer credit will be increased by €100, increasing that payment to €1,200 per year.
Housing
The Minister said housing is a priority, and he has allocated €1.83 billion for 2018 – with some 3,800 new social houses being built next year.
An additional €500 million will be provided for a direct building project, which will aim to see an additional 3,000 new build social houses by 2021.
Funding for homeless services will see an increase of €18 million, to over €115 million in 2018.
Meanwhile, in the commercial property market, the level of stamp duty on these buildings will rise from 2% to 6% from midnight tonight.
In an important move, and in the hope of freeing up vacant sites, the 3% first year levy on these properties will rise to 7% in the second year.
Health
There will be an increase in the spend on health of €685m to a total of €15.3m – an almost 5% increase from 2017.
Prescription charges will drop down for medical card holders under the age of 70 from €2.50 to €2 per item and the monthly cap will reduce from €25 to €20, meanwhile the drug payment scheme monthly limit will drop by €10, to €134.
This Budget will also provide for a reduction in prescription charges for all medical card holders under 70 from €2.50 per item…
— MerrionStreet.ie (@merrionstreet) October 10, 2017
…to €2 per item with a subsequent reduction in the monthly cap from €25 to €20. #budget18 https://t.co/iD59znT4ae
— MerrionStreet.ie (@merrionstreet) October 10, 2017
As already stated, the price of a pack of cigarettes will increase by 50c, with a pro-rata increase on other tobacco products.
Elsewhere, there will be a new tax rate of 30c per litre on drinks with over eight grams of sugar per 100 millilitres, while there will be a reduced tax rate of 20c per litre on drinks with five to eight grams of sugar per 100 millilitres.
Minister Donohoe has also proposed to increase the VAT rate on sunbed services from the reduced rate of 13.5% to 23%.
The Minister said this in recognition of the clear evidence of a link between sunbeds and skin cancer, which is the most common form of cancer in Ireland.
Education
The education spend will be over €10m for 2018, a new peak for this sector, and 16.6% of the total expenditure.
This is expected to deliver almost 1,300 additional teaching posts in schools, and should see the pupil teacher ratio reduced to 26:1.
Education, at all levels, is the bedrock of Irish society – delivering benefits for the individual and for society. #budget18
— MerrionStreet.ie (@merrionstreet) October 10, 2017
It is hoped that this will also see over 1,000 additional Special Needs Assistants recruited for September 2018.
The National Training Fund levy will also see an increase from 0.7% to 0.8% to provide an additional €47.5m of additional investment in the Higher and Further Education sectors.
Added to this, the levy will further rise in 2019 to 0.9% and 1.0% in 2020.
Gardai
Budget 2018 will provide extra resources for the recruitment of an additional 800 Gardai, while another 500 civilians will also be recruited.
Today I will provide for resources to allow for the recruitment of an additional 800 Gardaí during 2018. #budget18
— MerrionStreet.ie (@merrionstreet) October 10, 2017
Small to Medium Businesses
In order to assist SMEs, Minister Donohoe also confirmed there will be a Brexit Loan Scheme, which will make available €300m at a competitive rate to businesses including food businesses, which he said have unique exposure to the UK market.
The VAT rate of 9% on the tourism sector will remain the same.
We will have plenty of reaction to Budget 2018 in this week’s paper, on sale on Thursday.
