Three 150-euro energy credits and mortgage income relief planned for Budget 2024
The government has signalled it will spend cautiously – despite expecting a surplus of 10 billion euro this year.
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Your support makes all the difference.Three 150-euro electricity credits, up to 1,250 euro relief for mortgage holders and a double child benefit are among the measures expected in Ireland’s budget to be announced on Tuesday.
The Irish government is set to unveil a mortgage interest relief plan which would see households recoup a maximum of 1,250 euro, subject to certain conditions.
A cut in the universal social charge (USC) is also planned, it is understood; the 4.5% rate is expected to be lowered to 4% and the point at which you pay that higher rate is to be extended by 2,800 euro.
The Budget will be delivered by Finance Minister Michael McGrath and Public Expenditure Minister Paschal Donohoe in the Dail at lunchtime.
Mr McGrath indicated on Saturday that people’s standard of living will improve on the back of the Budget and said he hopes the measures will have their desired effect.
The total cost of Budget 2024 is around 6.4 billion euro, with taxation measures worth 1.1 billion euro of the total.
Despite a forecasted surplus of 10 billion euro this year, the ministers struck a tone of caution last week as September’s exchequer returns revealed a slowdown in corporation tax receipts for the second month in a row.
With the quarter three returns falling short of projections, Mr McGrath said the figures were a timely reminder of the need for careful management of the public finances.
Ahead of his first Budget as Finance Minister, Mr McGrath said: “Given capacity constraints and the fact that inflation still remains high in comparative terms, there will be a limited amount of space available this year for temporary once-off supports to assist with the cost of living, focused, where we can, on the most vulnerable.”
Amid continued high fuel and energy prices as well as increased grocery prices, senior coalition figures had already indicated that the one-off measures to tackle the cost-of-living crisis will be of a smaller scale than last year.
The Government has defended this move by saying inflation has moderated and wage increases across the economy have outpaced rising prices since last year.
The public are expected to see the first benefits of the reduced cost-of-living package before Christmas.
Minister for Social Protection Heather Humphreys confirmed that welfare rates will rise for pensioners, carers, people with disabilities and working families in Budget 2024.
There will be nine lump sums paid out over winter months worth 1.2 billion euro, it is understood.
This includes a double child benefit payment (280 euro); 200 euro for living alone allowance recipients; 400 euro for those on the carers support grant; 400 for those on the disability support grant; 400 euro to people on the working family payment; a 300 payment for those receiving a fuel allowance; and 100 euro for qualified child bonus recipients.
There will also be a Christmas bonus and January bonus for social welfare recipients.
Minister for Education Norma Foley will extend the free books scheme to first, second and third-year secondary school pupils. This will cover books as well as items such as copybooks and calculators.
The extension of the scheme is worth 55 million euro and the scheme in total is now expected to benefit 770,000 young people.
A rise in the minimum wage and measures to help landlords and renters have also been widely floated.
Taoiseach Leo Varadkar said there will be a focus on children throughout the Budget, particularly in the areas of social protection, education and childcare.
Minister for Children Roderic O’Gorman previously pledged to halve childcare fees across two years.
Last year’s budget delivered a 25% cut but it has not yet been confirmed if the second 25% reduction will kick in this year.
Mr Varadkar has also said the surplus will be partly used to bring down the national debt, with money also diverted to two new funds – one to address future pension costs and the second an infrastructure reserve, which future governments could use to maintain spending on capital projects at times of economic difficulty.
One of the largest issues looming over the pre-Budget negotiations was the one billion overrun in the Department of Health, with Tanaiste Micheal Martin saying population growth in Ireland over a short space of time had led to an increased demand for health, education and childcare services.
Mr Martin said on Monday: “Above all we want to protect for the future and we want to provide finances to ensure that people’s entitlements into the future are secure”.
Green party leader and Minister for the Environment Eamon Ryan told reporters on Monday that Government will have temporary supports to deal with the “high energy crisis period”.
Mr Ryan said a PRSI increase was being examined as “the right thing to do”.
“We need some tax-raising measures. We have to get the balance here. The economy is at full tilt – we have to protect people from the cost-of-living impacts but, at the same time, we have to make sure that we maintain sustainable public finances.”
The Social Democrats’ finance spokesperson Roisin Shortall has said she has concerns about whether the Budget will provide supports for the poorest children in the country, a disability payment and a pension increase to keep pace with inflation.
She said: “A big criticism of the budget last year was the lack of targeting. All of the signs are that we’re going to have a repeat of that this year where resources will essentially be going to people who don’t actually need it.”
People Before Profit TD Richard Boyd Barrett called for investment in social and affordable housing as well as infrastructure, the health service and education to be increased by billions of euro.
Mr Boyd Barrett said: “It’s very, very depressing when you think about how severe the housing and homelessness crisis is now, with all the additional revenues available to the Government, they didn’t allocate billions more to deliver, acquire and build more public and affordable housing.”
Minister McGrath will begin his Budget speech in the Dail at 1pm, followed by Minister Donohoe at 1.45pm and opposition replies from 2.30pm.