Here’s everything you need to know about Budget 2024

Recent budgets have focussed on a major theme such as Brexit, Covid, and the recovery from the pandemic.

And this year, like last year, the focus was on the cost of living.

The Government announced a huge budget package of €14 billion to help put money back into people's pockets - the vast majority of which was on spending measures. 

However with inflation still running at over 5%, rents and energy prices at astronomical levels, and mortgage rates on the rise, many households may find themselves not much better off than last year. 

As in previous years, many of the announcements had been leaked well in advance meaning Michael McGrath could probably have saved himself a trip to the Dáil!

But in case you missed it, here's a look at the main measures and what it all means for your pocket.

Income tax and USC

Income tax bands and tax credits were increased to help workers keep more of their money.

However a lot of the changes are simply keeping up with inflation and wage growth, meaning many workers will still pay the same percentage of their wage in tax next year as they did this year. 

• The PAYE/Employee Tax Credit and the Personal Tax Credit will both increase by €100 to €1,875 i.e. €3,750 in total. This will save most workers €200 a year or almost €17 a month. 
• The point at which people start paying the top 40% rate of income tax will increase by €2,000 to €42,000 for a single person, however this is still very low by international standards. For example the equivalent cut-off rate in the UK is over €60,000. Anyone earning over €42,000 a year will benefit fully to the tune of €400 a year or just over €33 a month. The cut-off point for married, one-earner couples will rise by a similar amount to €51,000.
• Income tax and employee PRSI rates will remain the same. But the minister flagged that all PRSI rates will increase by 0.10% from October 2024.
• The 2% USC band will increase from €22,920 to €25,760 to take account of the recent increase in the minimum wage. Anyone earning over €25,760 will benefit fully by around €71 a year or around €6 a month. 
• The 4.5% USC rate will be cut to 4%. Depending on how much you earn, this measure will save you up to €220 a year or around €18 a month.  
• The Earned Income Tax Credit for the self-employed will also increase by €100 to €1,875.
• The Home Carer Tax Credit will increase by €100 to €1,800.
• The Incapacitated Child Tax Credit will increase by €200 to €3,500.

Energy 

All the main energy suppliers have announced moderate price decreases over the past few weeks. However this will still leave prices this winter around double normal levels so further help with energy bills had been well flagged.

A new €450 energy credit will be paid to all households' electricity accounts in three instalments of €150 over the coming months. You can read more about how the new credit will work here.

The reduced 9% rate of VAT on gas and electricity bills is also being extended for another 12 months.

Households in receipt of the fuel allowance will receive an extra lump sum of €300 before Christmas in addition to their regular weekly payment. See here for more information on the allowance and how to apply for it.

Those with solar panels who sell electricity back into the grid can now earn €400 a year tax-free, up from €200 a year previously. See here for more information on the micro-generation scheme . 

The Carbon Tax

The Government has already committed to increasing the carbon tax to €100 per tonne by 2030 so another increase in the tax was almost a forgone conclusion, 

Carbon tax will increase by a further €7.50 to €56 per tonne of CO2.

This will increase the price of a litre of petrol and diesel by around 3 cent from tonight. While the increase on home heating fuels won't kick in until May.

So what exactly does that mean for your pocket?

Below is an approximate outline of what the tax increase will add to various fuels, as well as the total amount now being paid in carbon tax.

*Based on average annual consumption of 11,000 kWh of gas

**40kg bag

**Based on 900-litre tank

Social Welfare measures 

There will be an across-the-board increase in social welfare payments. The State Pension, Jobseekers’ Allowance and other welfare payments will increase by €12 a week from January.  

The Christmas Bonus will be paid to all social welfare recipients in early December. In addition to this, there will be a one-off "Cost of Living" double payment to all social welfare recipients in January.

There will also be a double Child Benefit payment before Christmas, worth €140 per child. And from September 2024, Child Benefit will be extended to children aged 18 who are in full-time education.

The other main social welfare measures announced were:

• A one-off €400 payment will be made to carers and those on Disability Allowance.
• Those in receipt of the Living Alone Allowance will receive a one-off €200 payment. 
• Those in receipt of the Working Family Payment will receive a one-off €400 payment.
• Those in receipt of the Invalidity Pension will receive a one-off €400 payment. 

If you're unsure of any welfare assistance that you might be entitled to, check in with your local welfare office over the coming days.

Housing

The main announcements were: 

• The Help-to-Buy scheme for first-time buyers, which allows for a tax rebate of up to €30,000 to help towards a deposit, has been extended until the end of 2025. You can find out more about the scheme here
• The rent tax credit, introduced again last year, is being increased to €750. A tax credit simply reduces your tax liability by the size of the credit. So most renters will in essence be given a €750 refund on their annual rent. However to claim the credit your landlord must be registered with the Residential Tenancies Board (RTB).
• Homeowners who have seen their interest rate increase will be able to avail of mortgage interest relief. Tax relief of 20% will apply on the increase in the interest paid on a mortgage between 2022 and 2023, up to a maximum of €1,250. So if the interest on your mortgage has gone up by €250 a month (or €3,000 a year) you'll be able to claim €600 i.e. 20% of €3,000. The relief will only apply to those with a mortgage balance of between €80,000 and €500,000. Homeowners can apply for the support through Revenue’s Online Service. You can read more about the new measure here.  

The Old Reliables

It hasn't been a good Budget for smokers (is it ever?).

The excise on cigarettes has gone up by 75 cent, bringing the price of a pack of 20 cigarettes up to around €17. A tax on vapes is set to be introduced next year.

The excise on alcohol has remain unchanged again this year. However the introduction of minimum unit pricing on alcohol in 2022 has already seen the price of cheaper alcohol increase significantly.

Last year the Government temporarily reduced the excise on petrol by 20 cent and by 15 cent on diesel, which it has been reversing in recent months. However the final scheduled 7 cent increase in the price of petrol and 6 cent increase on diesel has been delayed until the end of March next year.

Education

The main announcements were: 

• The Hot School Meals Programme, which provides school goers with one free hot meal a day, will be extended to a further 900 schools. 
• Students grants will increase by over €300 from January, which will benefit around 50,000 students.
• There will be free secondary school books for those up to 3rd year from next September. This builds on the free primary school books introduced last year. However it won't apply to students attending fee-paying schools.
• The fees for State school exams will be waived for next year.
• The €1,000 reduction in the Student Contribution Charge for third-level students will continue for the 2023/24 academic year.

Transport 

The young adult Leap Card, which reduces the cost of public transport by 50%, will now be available to those aged between 19 and 25. Previously it was only available to those up to 23.

The 20% reduction in public transport fares, which was introduced as a temporary cost-of-living measure in 2021, will be extended for another year.

And funding of €21m will be provided for road safety measures in response to the rise in fatal road traffic collisions on Irish roads in recent months.

Don't forget...

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