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Budget 2017

What Budget 2017 means for someone earning around €40,000

What does the budget mean for you?

shutterstock_440992417 Shutterstock / Memory Stockphoto Shutterstock / Memory Stockphoto / Memory Stockphoto

MOST OF WHAT was contained in today’s budget was of course well-flagged, but now that the speeches are done and dusted we can take a look at what it all means for you.

If you’ve been earning in or around €40,000, here’s how things will stack up for  you over the coming year.

Income Tax

There have been no changed in income tax rates so no difference will be seen here.

The main benefit seen will be for the self-employed – the second of three increases in the earned income tax credit, amounting to €400, has been implemented.

That rate still lags behind the automatic deduction for PAYE workers of €1,650 however.

Saving: €400 if you’re self-employed, unchanged for PAYE workers

USC

The USC has been cut once more in its three lowest brackets, and this will lead to a saving for you.

If you’re single, in your 20s, and earning €40,000, you’re currently paying USC across the top three rates totalling about €1,493 a year.

Each of these top three rates have now been reduced by 0.5%, while the second cutoff band has been increased slightly to €18,772.

This is now the USC obligation for someone earning €40,000:

  • 0.5% on the first €12,012 = €60.06
  • 2.5% on up to €18,772 = €169
  • 5% on up to €40,000 = €1,061.40

It means that your USC payments next year will now total about €1,290.

That’s an additional €203 a year, or an extra €4 a week.

Saving: €203

Social Welfare

Not a taxation measure, but social welfare rates have been increased by €5 across the board. So this change will affect things like carers’ allowance and disability allowance.

Other

If you’ve got young children, a new childcare scheme will be set up from next September. This new Single Affordable Childcare Scheme promises both means-tested subsidies, based on parental income, for children between six months and 15 years and universal subsidies for all children aged six months to three years.

Meanwhile, The Early Childhood Care and Education Scheme and the pre-school scheme will be extended with a further €86 million provided for the full year costs.

The Housing Assistance Payment Scheme and Rent Supplement will see increases of €105 million (220%) that will make those programmes available to an additional 15,000 households.

Fuel has remained untouched in the budget, as has alcohol.

Unfortunately, as is by now traditional, if you smoke cigarettes a packet of 20 has gone up by 50 cent.

Read: Up by a fiver: Social welfare payments to increase by €5 from March

Read: “Not Brexit-proof” – there’s a deal of good news for the self-employed today, but is it enough?

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