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Which Budget changes kick in today?

Changes to tax bands and USC take effect today – here’s how they’ll impact your pocket.

SOME OF THE Budget changes announced by Finance Minister Paschal Donohoe back in mid-October kicked in more-or-less immediately – but many more take effect from today.

Cigarette duties were increased by 50c from midnight the day after Budget Day, for instance – raising the price of a 20-pack of cigarettes to €12.

Other changes – like the rises in social welfare payments – won’t take place until the end of March.

Here are the changes kicking in today – and the ones happening later in the year.


In terms of practical impact – the direct impact on your pocket – the changes to income tax and USC are the main changes to note today.

The entry point for single earners to get charged the higher rate of tax will increase from €33,800 to €34,550, a rise of €750.

This means that anyone earning under €34,550 will only be charged the normal rate of tax, while those earning over it will see a slight reduction in the tax that they pay.

The standard rate band for married one-earner couples rises from €42,800 to €43,550.

The 2.5% rate of USC will reduce to 2%, and the ceiling for this new rate will increase from €18,772 to €19,372.

The 5% rate of USC, meanwhile, will reduce from 5% to 4.75%.

Adding the above tax and USC changes together, it results in savings of around €250 a year for earners on €40k a year.

Budget 2018 994_90526031 Paschal Donohoe makes his Budget 2018 speech. Source: Sam Boal

Elsewhere, the Earned Income Tax Credit will increase from €950 to €1,150.

This payment is relevant for taxpayers earning self-employed trading or professional income in certain cases and for business owner/managers who are ineligible for a PAYE credit on their salary income.

Minimum wage

The national minimum wage increases from €9.25 per hour to €9.55 per hour from today.


The prescription charge for medical card holders under the age of 70 is being reduced from €2.50 per item to €2 per item from today. The monthly cap will be reduced from €25 to €20.

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VAT on sunbed services increases from 13.5% to 23%. Paschal Donohoe said the increase was to acknowledge the “clear evidence” of a link between sunbeds and skin cancer, and is made out of a concern for public health.

The government also talked up increases in funding for day services for school leavers with disabilities and more money for mental health services, as part of its Budget measures.


The government plans to recruit a further 800 gardaí this year. Details will be published on PublicJobs.ie.

Source: TheJournal.ie/YouTube

What’s happening later in the year?

In addition to the above, the government has also promised more money for areas like electric vehicles, more funding for child and family agency Tusla and an increase in apprenticeships. A number of measures to tackle the housing and homelessness crisis were also announced in October’s Budget.

In terms of concrete dates, however, here are some changes to payments and taxes taking place in the coming months:

  • Weekly social welfare payments will increase by €5 per week from 26 March
  • This also applies to employment programmes such as Community Employment (CE), Tús and the Rural Social Scheme
  • State Pensions will increase by €5 per week with proportional increases for qualified adults and those on reduced rates of payment
  • The Working Family Payment (formerly called Family Income Supplement) income thresholds will increase by €10 for families with up to 3 children (also from 26 March 2018)
  • The government is planning to introduce a sugar tax on 1 April – applying to sugar sweetened drinks with a sugar content between 5 grams and 8 grams per 100ml, at a rate of 20c per litre. A second rate will apply for drinks with a sugar content of 8 grams or above at 30c per litre.

There will also be an extension to the free preschool scheme from September, according to last October’s Budget. An increase of over 1,200 teaching posts is also being promised for the start of the autumn term this year.

Related: Doctors say health budget will do little to improve ‘overcrowded death zone’ hospitals >

Budget 2018: Here are the main points you need to know > 

Watch: We answered all of your Budget 2018 questions live >

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Daragh Brophy

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