Readers like you keep news free for everyone.

More than 5,000 readers have already pitched in to keep free access to The Journal.

For the price of one cup of coffee each week you can help keep paywalls away.

Support us today
Not now
Advertisement

Double child benefit payment, welfare hikes and tax changes - here's what to expect in the Budget

Budget Day is just over six weeks away, but with inflation rising, it can’t come quick enough for many.

Image: Alamy Stock Photo

BUDGET DAY IS just over six weeks away, but the kite-flying and speculation is well underway. 

It has already been signalled that in Budget 2023 – which takes place on Tuesday 27 September – there will pension and social welfare increasestax-free bonuses for workers, help for renters, tax breaks for landlords, bonus electricity credits as well as a double social welfare payment before Christmas. 

So, what do we know so far and what’s the latest. 

With the Government coming under increasing pressure to roll out targeted measures that will help those most in need, a senior source has said the Government is considering a double payment of the €140-a-month child benefit payment on Budget day.

The move, which has been described as a definite runner for next month, would see parents with one child in line to get a €280 one-off payment before Christmas. 

Other measures that are aimed at families is Government’s plan to reduce childcare costs “considerably” in the next Budget. As reported by The Journal in April, this will include increased State supports and a reduction in the cost of services. 

Changes in taxation are also likely, with a new 30% income tax band under serious consideration. Tánaiste Leo Varadkar said this week that it would benefit around a million workers.

Varadkar said that the 30% rate was one of a number of options outlined in the Tax Strategy Group papers, which were published this week, but he stressed that no decision has been made yet. 

Also within the papers is the idea of increasing the social welfare payment substantially to keep in step with inflation has been floated.

While the exact amount of the increase is still to be decided upon, a double social welfare payment for recipients is expected before Christmas. 

Another payment expected before the year is out is another electricity credit, similar to what was issued by Government in April. While there have been calls for this measure to be more targeted, it is understood there are limitations to restricting the payment. 

As mentioned, much of the €6.7 billion budget for 2023 will focus on interventions to be rolled out this year, given the cost-of-living crisis. 

Further reductions in public transport fares are expected with sources stating that it is hoped the short hop zone, which caps fares, will be extended to commuter zones outside the capital.

In terms of workers that might be in line for a bonus, Varadkar previously confirmed to The Journal that the Finance Minister Paschal Donohoe is also working on the proposal to increase a tax-free bonus amount an employer can give an employee from €500 to €1,000 annually.

Under current rules, employees can only receive a benefit of €500 in value, tax free, each year from their employer.

This benefit must not be in cash but can be in the form of vouchers or cards that can be used to purchase goods or services. 

Government sources have said they are aware of the growing anger regarding the housing crisis, particularly in the rental market. 

In relation to tax breaks for landlords, Varadkar said this week that it is a good idea, but that renters need to get something in the budget too, though he didn’t go into specifics.

“I do think that if there are any significant income tax or tax concessions for landlords in the budget, well there should be for renters as well.

“It wouldn’t be fair to say that we’re going to give tax concessions to landlords, in order to keep them renting, which would be a good thing, but then to say to renters ‘well there’s nothing in it for you’ – that wouldn’t be fair,” he said.

Government has promised to introduce a vacant property tax to tackle the scourge of vacant and derelict houses dotted across the country. All indications are that the Help-to-Buy scheme will be extended again.

It has been also well flagged that students should expect to see a reduction in their student fees in this year’s budget. 

While ministers will be making their final case to the Department of Public Expenditure this month, in the background is the public pay deal which is yet to be dealt with after negotiations collapsed earlier this year.

Making a difference

A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article.

Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

For the price of one cup of coffee each week you can make sure we can keep reliable, meaningful news open to everyone regardless of their ability to pay.

Read next:

COMMENTS (82)

This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
write a comment

    Leave a commentcancel