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Irish budget: Everything you need to know

Published 11/10/2016

Finance Minister Michael Noonan with Minister for Public Expenditure and Reform Paschal Donohoe, outside Government buildings in Dublin before he delivered the Budget.
Finance Minister Michael Noonan with Minister for Public Expenditure and Reform Paschal Donohoe, outside Government buildings in Dublin before he delivered the Budget.

Only one tax hike combined with modest initiatives to ease the everyday cost of living for working families and the most vulnerable were billed as the hallmarks of the Irish budget.

On welfare, five was the magic number, with s tate pensions, dole for the unemployed, carers' allowance and disability supports all up by five euro from March next year.

The cap on prescription charges for over 70s is also being cut by a fiver, down to 20 euro.

On the unprecedented housing crisis, questions will be asked about the tax rebate initiative and on whose bidding the first-time buyers' payback was drawn up - the builders or the house hunters .

The scheme gives a 5% income tax refund for those getting the first foot in the market with a house worth up to 400,000 euro and a cap of 20,000 euro for houses up to 600,000 euro.

It only applies to new homes, is backdated to July 19 this year and runs until the end of 2019.

Tax cuts are what all workers want to hear.

The deeply unpopular income tax levy, the Universal Social Charge, will be cut by 0.5% across the three lower bands, in a move costing 335 million euro.

Those changes are worth about three to seven euro for people earning from 35-70,000 euro.

Alongside that, the t hreshold for the 2.5% rate is going up to 18,772 euro in order to keep minimum wage earners out of the higher levels.

Another key plank of Budget 2017 and a relatively small boon for working families is a childcare subsidy.

From September next year the state will offer universal payments for all youngsters aged six months to three years who are being cared for by a registered childminder, creche or nursery. It will be worth 960 euro a year.

A means-tested s ubsidy, based on parental income, will also apply for children between six months and 15 years.

Finance Minister Michael Noonan insisted his plans were all about prudent planning, with Brexit and other unknowns in mind, and a major initiative is a special "Rainy Day" fund.

Some 1 billion euro will be pumped into it every year to give future governments something to fall back on.

Elsewhere, hotels and restaurants are being supported again with the continued 9% VAT rate, and c orporation tax is remaining unchanged at 12.5%.

"Nobody in Europe or anywhere else is asking for it to be changed," Mr Noonan said.

Ireland also committed to a sugar tax, and in line with the UK it will kick in some time in April 2018.

Smokers again were given no breathing room. Cigarettes will be up 50 cents, cementing Ireland as one of the most expensive places in the world to buy tobacco, legally, at 11 euro for a packet of the dearest brands.

Drink was untouched, the second year in a row under Mr Noonan's watch.

Other big ticket items are increases in the thresholds for inheritance tax to be paid to 310,000 euro, moves to close tax avoidance loopholes being used by companies making big property plays and a range of tax relief to help Ireland meet its climate change commitments.

Press Association

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