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Dublin: 13°C Sunday 1 August 2021

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?

Image: Shutterstock/pixinoo

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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