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The Budget

Budget 2019: Here are the main points you need to know

How will today’s announcements affect you?

PASCHAL DONOHOE BEGAN his second Budget as Finance Minister at 1pm this afternoon. 

How will today’s announcements affect you? 

We liveblogged all the detail and reaction as it happened, and these are the main points: 

Income Tax 

  • Minister Donohoe increased the entry point to the higher rate of income tax for all earners by €750, raising it from €34,550 to €35,300 in the case of a single worker 
  • The third rate of the Universal Social Charge (USC) was reduced from 4.75% to 4.5%
  • The changes, Donohoe said, mean fewer people on incomes around the national average will have any income subject to the 40% rate of income tax

See what the tax changes mean for someone earning €20,000; €30,000 and someone earning €50,000

Social Welfare 

  • The Minister announced a €5 per week increase in all weekly social welfare payments, from next March
  • The 100% Christmas bonus payment to all social welfare recipients will be restored 

You’ll find more detail on the social welfare changes here.

VAT rate 

  • The 9% VAT rate for hotels, restaurants and hairdressing will be increased to 13.5%
  • Donohoe said this meant he would be able to avoid hiking other taxes
  • He said increased funding of €35 million would be provided to the Department of Transport, Tourism and Sport to partly offset that increase, including by increasing funding for regional tourism programmes

You’ll find more detail on the measure here


  • An additional investment of €1.2 billion would be provided for Health, Donohoe said
  • An additional €84 million will be provided for Mental Health Services in 2019, bringing the total to €1 billion 
  • There will be a 50 cent reduction in prescription charges from €2.00 to €1.50 for all medical card holders over the age of 70
  • There will be a €25 increase in the weekly income threshold for GP Visit cards
  • Donohoe also announced a €10 reduction in the monthly Drugs Payment Scheme threshold from €134 to €124

Minimum Wage 

  • The hourly minimum wage will be increased to €9.80 from €9.55 


  • From November 2019, a new paid parental leave scheme will be introduced to provide two extra weeks’ leave to every parent of a child in their first year

You’ll find more detail on the leave scheme here.

  • A €10,000 increase in the inheritance tax threshold from parents to children was announced. Donohoe said that he has decided to increase the lifetime Group A tax-free threshold, which broadly applies to transfers between parents and their children, from €310,000 to €320,000. Capital Acquisitions Tax is a tax on gifts and inheritances.

Read more about that here / YouTube


  • Donohoe said he was allocating a total of €2.3 billion to the housing programme for 2019
  • That includes €1.25 billion for the delivery of 10,000 new social homes in 2019 through a combination of construction, acquisition and leasing
  • 6,000 affordable homes are to be delivered, based on an increase in funding to a Serviced Sites Fund 
  • Income eligibility limits of €50,000 for a single applicant and €75,000 for dual applicant households will apply

There is more detail about the government’s plans here.


  • Excise duty on a pack of 20 cigarettes is being increased by 50 cents, bringing the price of cigarettes in the most popular price category to €12.70

For more information, see here


  • The Garda budget is being increased by €60 million or 3.5%, allowing for recruitment of up to 800 gardaí


  • Donohoe announced a 1% surcharge for diesel vehicles to apply across all VRT bands
  • A new accelerated capital allowances scheme is being brought in for gas-propelled vehicles and refuelling equipment, to encourage uptake


  • Donohoe announced provision of over €110 million for Brexit measures across a number of Departments
  • €60 million in current and capital Brexit-related supports will be provided to improve resilience in the farm sector 

Corporation Tax 

  • Our longstanding 12.5% rate will not be changing, Donohoe said

Rainy Day Fund

  • A Rainy Day Fund of €1.5 billion will be established. It will be capitalised with €1.5 billion from the Ireland Strategic Investment Fund and supplemented with an annual contribution of €500 million from the Exchequer starting from 2019. He also said that “historically high levels of corporation tax will be set aside for the purpose of capitalising the fund”.

See how it will work here.

The Arts

  • The film industry got a boost – Section 481 was extended. This is the Irish tax incentive for the film and television industry.
  • There will also be a regional uplift of 5% to Section 481 for four years. Screen Ireland said that this “will encourage Irish and international to film on location across the regions of Ireland”.
  • Meanwhile, the Arts Council got a 10% uplift in its Budget 2019 allocation, after dramatic post-recession cuts. 
  • There is also an increase in funding for Creative Ireland, though we don’t know exactly what its allocation for 2019 will be yet.

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