LAST UPDATE | 7 Oct 2025

BUDGET 2026 IS different to last year’s, that much we knew for sure before a word had been uttered. 

Last year’s splurge came on the eve of a general election, so perhaps it’s no surprise that personal tax cuts and double payments were the order of the day.  

Today’s Budget by Finance Minister Paschal Donohoe will increase overall government spending by €9.4 billion but the bulk of it won’t be going into people’s pockets. 

Instead, the government is trailing it as the biggest capital investment in the history of the State. That means things like infrastructure will be getting a boost, with weekly social welfare payments also being supplemented.

The spending breakdown is €8.1 billion allocated for public spending and €1.3 billion for cuts to taxation. 

Our liveblog of the latest is here, but below is the list of all the main things to be announced:

Income Tax

• As expected, there no changes to personal income tax for workers. 
• The minimum wage will increase by €0.65 to €14.15 per hour from 1 January. Accordingly, the lowest 2% rate of USC is tweaked to keep full-time workers who are on the minimum wage outside the net. 

Other taxes and credits

• VAT rate for the hospitality sector is reduced to 9% from 13.5% but it won’t kick in until July 2026. 
• The reduced 9% rate on gas and electricity is extended to December 31, 2030 

Social Welfare

• €10 increase across weekly social welfare payments
• The Child Support Payment increases by €8 for under 12s and €16 for over 12s
• On the means-tested Carer’s Allowance, the means test disregard will increase to €1,000 for a single person and €2,000 for a couple
• An increase in the weekly Fuel Allowance rate by €5 to €38
• Confirmation of Christmas bonus double payment to long-term social welfare recipients. 

Infrastructure and transport

• Allocation of €2 billion for Metrolink
• Total of €1.4 billion to Uisce Éireann for water and wastewater services
• €3.5 billion to ESB and EirGrid for energy security

Old reliables

• 50c increase on a pack of 20 cigarettes from tonight.  

Children

• More than 285,000 children set to benefit from the National Childcare Scheme in 2026, an increase of 35,000.
• Funding for 1,717 additional SNAs for students with special needs.  
• The back-to-school clothing and footwear payment extended to 2-3 year-olds.

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Housing

• A new Derelict Property Tax will replace the 7% Derelict Site Levy. The tax ‘will not be lower’ than the existing levy and will be legislated for next year. 
• The €1,000 Rent Tax Credit is set to stay at the same rate but is extended for three years to the end of 2028.
• Property developers to benefit from a reduction in the VAT rate on the sale of completed apartments to 9% from 13.5%
• A total of €2.9 billion to build or acquire new social homes

Defence and Justice

• Funding for 400 additional Defence Force members and 1,000 trainee gardaí, both of which have been criticised by unions.  
• An additional €39 million for the Irish Prisons Service, totalling €579 million for the year. 

Arts

• Expansion of Film Tax Credit to provide 40% relief for minimum of €1 million spent on VFX. 
• Extension of the Digital Games Tax Credit for 6 years to December 2031

Climate

• Rate of Carbon Tax for petrol and diesel will increase from €63.50 to €71 per tonne. The increase applies to auto fuels from tomorrow and other fuels by next May. 
• The €5,000 VRT relief for electric vehicles is extended for a further year until end 2026.
• Allocation of €82 million set aside to support just transition in the midlands, this includes the decarbonisation of bus routes.