main points

Budget 2021: Here are the main points you need to know

The government has revealed the biggest budget in the history of the State. How does it affect you?

THIS AFTERNOON THE government unveiled its Budget for 2021, revealing how it plans to spend €17.75 billion – the largest budget package in the history of the  State.

Here are some of the headline takeaways from it…

Welfare supports

  • No change to main benefit rates, but the payment that families in receipt of a weekly benefit receive for children will increase by €2 per week for children under 12 and by €5 per week for children over 12. 
  • The pension age will stay at 66. 
  • Self-employed recipients of the Pandemic Unemployment Payment will be able to earn up to €480 per month without losing their payment. The government has indicated this will come into effect “very quickly”. 
  • Illness benefit will now be available after three days out of work, rather than six. 
  • The one-week Christmas bonus will be given this year to people on a welfare payment for four months up to December, including those in receipt of PUP.
  • The Carer’s Support Grant to increase by €150, from €1,700 to €1,850 per year. 
  • The Living Alone Allowance will increase from €14 to €19 per week.
  • Fuel Allowance is to be increased by €3.50 per week.
  • The parent’s benefit is to be extended by three weeks to allow people more time with their newborn during their first year.
  • The Working Family Payment thresholds with families with up to three children is to be increased by €10.
  • The €425 earnings threshold for the One-Parent Family Payment is to be removed. 
  • The Widowed or Surviving Partner Grant will be increased by €2,000.


  • No changes to income tax, USC or PRSI rates, but the ceiling of the second USC band will be increased from €20,484 to €20,687 to support those on minimum wage.
  • The dependent relative tax credit will increase from €70 to €245. 
  • Carbon tax will be increased by €7.50 per tonne next year, from €26 to €33.50 per tonne. This kicks in from tonight for auto fuels and then will be applied to all other fuels from 1 May next year. The Finance Minister has said funds will be ring-fenced to protect those at rusk of fuel poverty.
  • Tax on a pack of 20 cigarettes is to rise by 50c.
  • Changes to the Vehicle Registration Tax bands based on emissions to incentivise people to buy low emission cars. 
  • The farm consolidation stamp duty relief is to be extended by two years to 31 December 2022. 

Business supports

  • Weekly rebates of up to €5,000 for businesses closed at Level 3 or higher. 
  • The VAT rate for the hospitality sector will drop from 13.5% to 9% with effect from 1 November this year until December 2021. 
  • €55 million for a tourism business support scheme and €5 million for tourism product development.
  • Commercial rates will be waived for the remainder of 2020.
  • €50 million in live event supports and an additional €50 million in funding for the Arts Council, bringing its funding to €130 million in 2021.


  • Additional spending of €4 billion has been agreed, including €2 billion for Covid measures.
  • This will provide for 1,146 acute beds, 1,259 community beds, five million additional home care hours and €38 million for new mental health measures. €100 million will be put towards new disability measures next year.


  • €500 million to facilitate the construction of 9,500 new social housing units in 2021.
  • HAP expenditure will be €558 million supporting over 67,000 tenancies, including 15,000 new tenancies.
  • €65 million to facilitate retrofitting in the social housing stock.
  • €22 million for homelessness programmes.
  • €110 million for affordable and cost rental schemes.
  • €210 million will be made available under the Rebuilding Ireland home loan scheme.


  • The teacher to student ratio will be reduced to 25:1.
  • 300 new teaching posts will be created. 
  • €2 billion will be provided to fund recruitment of 990 new special needs assistants. 
  • Increased funding for the school meals programme will provide for meals for up to 35,000 additional children.
  • A €50 million fund will help third-level students switch to online learning and the SUSI grant will be increased for post-graduate students.
  • 50,000 further education and training places in 2020/2021

Garda resources

  • Funding will be provided to train up to 620 new recruits.
  • Additional funds for the recruitment of 500 civilian staff.
  • Up to 70 new garda cars will also be bought to replace current models which are currently leased.

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