The highlights of the Budget for 2018 in Republic of Ireland have been announced by the Minister for Finance.
Income Tax and Universal Social Charge
Your will have slightly more money in your pocket but not much!
There will be €750 more income tax within the lower tax rate with the higher tax rate of 40% coming into effect for a single person for income at €34,550.
The Universal Social Charge will decrease the rate in bracket 2.5% to 2%, and the ceiling for this new rate will increase slightly to €19,372. The 5% USC rate will be reduced to 4.75%.
The Earned Income Credit for the self-employed will rise by €200 to €1,150 a year, meaning that self employed people are still taxed at a higher rate than PAYE employees.
Social Welfare and Allowances
Social welfare payments will increase by €5 per week from end of March 2018, and in 2017 a bonus payment at Christmas for 85% will be paid.
The earnings threshold for the One Parent Family Payment and Jobseekers’ Transitional scheme will increase by €20, and will increase by €10 per week for families with 3 kids for the Family Income Supplement, along with a €2 per week rise in the rate of the qualified child payment.
The home carer credit will increase by €100, which is a small benefit but not enough for these selfless people.
The Living Alone and Fuel allowances got a €2.50 increase in the Telephone Support Allowance.
Not good news, I’m afraid! Mortgage interest relief cut but for people with loans from 2004 to 2012 it is being continued to 2020, it will be at just 75% of the rate in 2018, 50% in 2019 and 25% in 2020.
The vacant site levy will be increased to 3% in the first year and then 7% from the second year to get developers building on vacant sites.
The 7 year period for owners to enjoy full relief from Capital Gains tax has been reduced to 4 years.
There should be approxiamtely 4,000 social houses built by government bodies in 2018.
The Housing Assistance Payment Scheme will increase to permit an additional 17,000 households to be accommodated next year.
The homeless crisis will get an additional €18m for services, which again is too small to solve the issue.
Stamp duty on commercial property transactions will rise from 2% to 6%.
There will be an extra 1,300 teaching jobs and over 1,000 new Special Needs Assistants in 2018.
There will be an extra 800 gardaí hired along with another 500 civilians also.
The health sector will get an additional 1,800 staff in frontline.
Prescription charges for all medical card holders under 70 will decrease by 20% .
The monthly cap drops from €25 to €20, with the threshold for the Drugs Payment Scheme dropping from €144 to €134.
The Department of Health will get an increase of €685 million funding.
From April 2018, there will be a sugar tax of 30 cents per litre of tax on drinks with over 8g of sugar per 100ml and a reduced rate of 20% per litre on drinks with between 5g and 8g of sugar per 100ml.
Smokes, Sunbeds, Booze and Petrol
Excise duty on a packet of 20 cigarettes will rise by 50 cents, and VAT on sunbed services will increase from the reduced 13.5% to the standard 23% rate.
Alcohol, petrol and diesel escaped price hikes.
There will be an incentive to get electric vehicles via the Renewal Heat Incentive, and there will also be a 0% benefit-in-kind rate for electric vehicles alongside the VRT relief and SEAI grant.
The lower VAT rate on the tourism and services sector remains, and a Brexit Loan Scheme will be available to small and medium businesses.
Overall, depending on your situation you may be minimally better off with the 2018 budget. However, with price increases over the last few years and what is still to come, I don’t think you will really be much better off.