NATIONAL MINIMUM WAGE
Rate to be cut by €1 an hour to €7.65. The Government has not given a timeframe for the cut, so it could be a big bang in the next budget or it could be reduced gradually over a period.
STATE PENSIONS
Under the terms of programme with the EU and IMF, these payments are to be frozen at existing levels for the duration of the four-year plan. So the next rise won’t be until 2015 at the earliest.
Even so, the cost of State pensions is projected to rise by €800 million over the four years as our population ages.
UNEMPLOYMENT BENEFIT
A reduction of €2.8 billion is being sought in the cost of social protection payments over the next four years. Some of this will be achieved by reducing unemployment, but cuts in a variety of welfare payments seem inevitable.
The Government won’t reveal its plans until December 7th.
PRIVATE SECTOR PENSION RELIEFS
Pension reliefs relating to PRSI and the health levy will be removed in the next budget. This will reduce the pension reliefs available to workers to 41 per cent in 2011. The annual earnings cap on employee/personal contributions will also be reduced by 25 per cent to €115,000.
Income tax reliefs will be gradually reduced over the following three years to a level of 20 per cent by 2014. However the Government has indicated that it is willing to amend its proposals if the saving of €700 million can be achieved through other mechanisms.
PUBLIC SERVICE PENSION PAYMENTS
Existing public service pensioners are to have their payments reduced by an average 4 per cent to reflect the effect of pay cuts and pension levies that public sector workers have taken over the past two years.
INCOME TAX
Tax bands will be widened and credits reduced to save €1.24 billion in 2011. This will reduce the entry point to income tax for a single PAYE person to about €15,300 and bring more people into the tax net.
Age-related exemptions and credits are to be phased out over the next four years and the artist’s exemption is to be restricted to €40,000 in earnings.
PRSI/HEALTH AND INCOME LEVIES
These are to be merged into a “Universal Social Charge”. It is not clear when this will happen or if the ceiling on PRSI payments will be removed.
Concerns have been expressed that removing the €75,036 ceiling on PRSI payments – which would hit high earners – could be viewed negatively by foreign companies investing here.
The PRSI and health levy reliefs for company share-related schemes are to be curtailed.
CORPORATION TAX
This is one tax that won’t be touched in any budget for the foreseeable future. It will remain at 12.5 per cent. The 10 per cent manufacturing rate ends this year so these companies will move to the higher 12.5 per cent rate.
The tax exemption for patent royalties will be abolished in 2011.
SITE VALUATION TAX
A property tax under a different name. A fixed charge of €100 will come into force in 2012. A “value- based addition” will be introduced in 2013. It is expected to raise €530 million in a full year.
EXCISE DUTIES
A hike in the old reliables has been signalled for the next budget, with the target of raising €110 million. Details to be announced on December 7th.
VAT
This will rise from 21 per cent to 22 per cent in 2013 and to 23 per cent in 2014. These will yield €620 million in a full year.
CARBON TAX
This is to be doubled to €30 a tonne in two stages. A rise of €10 a tonne will be introduced in 2012 and €5 in 2013. The Government wants to generate €330 million from this tax.
WATER CHARGES
These will be introduced in 2014, by which time metering is to have been installed across the State.