Budget Q&A - ask our experts about the budget (live Wednesday)
Cuts to USC, increase in tax credits for stay-at-home parents, a €5 increase in welfare payments, a rainy day fund and new Brexit measures were among the announcements made by Minister for Finance Paschal Donohoe in Budget 2019.
His full speech can be read here.
Here are the main points:
INCOME TAX
The 4.75 per cent rate of Universal Social Charge (USC) will fall by 0.25 percentage points to 4.5 per cent (on incomes between €19,874 and €70,004)
The point people hit the higher, 40 per cent rate of income tax will rise by €750 from €34,550 to €35,300 in the case of a single worker.
This means the top marginal rate on incomes up to €70,000 will be reduced to 48.5 per cent.
Minimum wage will increase to €9.80 and the second USC rate band will increase to €19,874 to keep these workers outside the top rates.
The level for the higher rate of employer’s PRSI will be increased by €10 from €376 to €386.
The home carer tax credit is increasing by €300 to €1,500.
For self-employed workers the earned income tax credit will be increase by €200 to €1,350.
Use our income tax calculator to work out how the budget affects your pocket.
OTHER TAX
Special 9 per cent VAT rate for the tourism and hospitality sector to be abolished, increasing to 13.5 per cent. This will raise €466 million. There will be €35 million in targeted support the tourism sector.
Excise on cigarettes to increase by 50 cent with a pro-rata increase on other tobacco. This will bring the price of 20 cigarettes to €12.70.
Tax-free threshold for inheritances between parents and their children increased by €10,000 from €310,000 to €320,000
Retaining 9 per cent VAT for newspapers and sporting facilities and reduce VAT for electronic publications from 23 per cent to 9 per cent.
Betting tax to increase from 1 per cent to 2 per cent. This will generate an additional €40 million.
No increases in excise on alcohol.
Film corporation tax credit extended to 2024.
WELFARE
All weekly social welfare payments (jobseeker's, pensioner's, carer's) will increase by €5 from next year, with the Christmas bonus restored to a double payment for the first time since the crash.
PRSI for self employed to be expanded.
Two weeks’ paid parental leave to every parent of a child under one year from November 2019, to increase to seven weeks over a number of years.
Qualified Child Payment paid to parents on social welfare will increase by €2.20 per week (under 12s) and by €5.20 per week (over 12s).
A €25 increase in back-to-school clothing and footwear allowance rates.
Increase earnings disregard for lone parents in receipt of the one-parent family payment by €20 a week.
CHILDCARE
Funding for early learning and childcare up €90 million.
The threshold to access the Affordable Childcare Scheme will be increased. To access the maximum subsidies families can earn up to €26,000 net (up from €22,700). The maximum income threshold for the scheme will go from €47,500 to €60,000.
EDUCATION
A 6.7 per cent increase in funding to the Department of Education will allow for 1,300 additional posts in schools in 2019.
The standard capitation rate per pupil will increase by 5 per cent.
An additional 950 special needs assistants to be recruited in 2019
Additional €196 million for capital investment in education.
An additional €300 million for third-level education up to 2024.
More than 15,000 new places in higher education and further education sector.
HEALTH
Increase of €1.05 billion in health funding
€25 increase in the weekly income threshold for GP visit cards
Prescription charge for over 70s reduced by 50 cent
Monthly maximum patients pay for prescriptions under Drug Payment Scheme reduced by €10 to €124
An additional €84 million for mental health services (up 9 per cent)
National Treatment Purchase Fund will get an extra €20 million (up 36 per cent)
Disability services will get an extra €150 million
HOUSING
Allocation for housing programme increased by €470 million or 26 per cent (when combined with local authority funding)
€1.25 billion for the delivery of 10,000 new social homes in 2019 through construction, acquisition and leasing.
Extra €121 million for the Housing Assistance Payment (HAP)
€60 million extra in capital spending much of which is targeted at emergency accommodation.
A €300 million affordable housing scheme.
Service site fund for local authorities to bring forward land for subsidised housing will increase from €20 million to €89 million. Funding available per subsidised home being increased from €40,000 to €50,000.
100 per cent mortgage interest relief for landlords.
ENVIRONMENT
1 per cent surcharge on Vehicle Registration Tax (VRT)on all new or imported diesel vehicles
€103.5 million for planting forests
Additional funding of €70 million for the Environment and Waste Management Programme.
Extending the VRT relief for hybrid vehicles until end of 2019.
New scheme to encourage the uptake of gas-propelled commercial vehicles as an alternative to diesel.
CRIME AND LAW
Increasing the Garda budget by €60 million or 3.5 per cent allowing for recruitment of 800 extra gardaí.
An extra €60 million to the broader justice sector to include spending on: additional asylum accommodation, widening of Magdalene scheme, relieve pressure on criminal legal aid system, respond to pressures on Data Protection office in EU role.
Direct provision weekly allowance to increase from €21 to €38 for adults, €29 for children.
Defence will get an extra €29 million for extra equipment and infrastructure
Overseas aid to increase by €110 million
BREXIT PREPARATION
New budgetary measures worth more than €710 million to protect against Brexit’s effect on Ireland.
A €300 million human capital initiative from 2020-2024 to increase investment in higher education
Over €110 million for Brexit measures across many Government departments including essential customs requirements
Increasing funding for the PEACE programme
A €300 million future growth loan scheme for SMEs and the agriculture and food sector
ECONOMY/BUSINESS
He announced a €1.5bn 'rainy day' fund to increase the State's resilience to larger economic shocks. Initial funding from Ireland Strategic Investment Fund with an annual contribution of €500 million from the exchequer
No change to corporation tax rate
Extend three-year tax relief for certain start-up companies until the end of 2021.
Regulation of crowdfunding businesses
TRANSPORT
There will be €286 million for roads and other transport infrastructure including N4 Collooney to Castlebaldwin road in Co Sligo, the Dunkettle interchange in Cork city, work on Knock airport's runway and cycling and walking projects
An extra €40 million to repair regional and local roads and footpaths.
RURAL AND AGRICULTURE
An extra €57 million to the Department of Agriculture to support the sector, especially disadvantaged farmers
Renew stock relief measures for three years
Three-year extension of the stamp duty relief for young farmers
Additional €53 million for projects under new Rural Regeneration and Development Fund.
