Budget 2025: Who's getting what?
Approximately Between In Tax Budget By Changes Has This File Chambers Measures, Living Benefit Picture: Of €1,000 Said Will Cost And Pa Jack Workers
Next Tuesday, ministers Jack Chambers and Paschal Donohoe will take to their feet in the Dáil to announce the Government's pre-election budget.
As always, the final negotiations are expected to go down to the wire, but members of the Coalition have been flying kites on childcare, pensions, inheritance tax, and energy credits for many weeks now.
This year the Government has a €8.3bn package to work with, which will be split between €6.9bn of public spending and €1.4bn on tax cuts and changes.
With a general election on the horizon, the Coalition parties are eager to provide voters with some sweeteners, while at the same time, ministers have been stressing that they are prudent with the public purse.
The Government is hoping that the giveaways made through cost-of-living supports and once-off payments, many of which can then be doled out before Christmas, will be appealing to voters.
Finance Minister Jack Chambers has already promised a significant cost-of-living package that will include energy credits, however, the overall pot may not be as large as last year.
"I think energy credits can play a really important role to protect people and families through the winter period," said Mr Chambers. "And I think that will be a component of our cost-of-living package."
On top of this, the Government is preparing to make two social welfare bonus payments before the end of the year as part of a more targeted cost-of-living measure.
The traditional Christmas bonus on all major social welfare payments, including the State pension and jobseekers' benefit, will be given in December as normal.
But there are now also plans for a second set of bonus payments to be paid in the immediate aftermath of the budget in October.
Other lump sum payments announced last year included a €300 fuel allowance payment; a €400 disability grant, and a €400 lump-sum Working Family Payment. These could all be in the mix again this year.
Between tax changes and cost-of-living measures, Mr Chambers has said workers will benefit by approximately €1,000 in this budget.
Similar to last year, it is expected that changes will be made to income tax thresholds and there will be further adjustments to the Universal Social Charge (USC). Ministers have repeatedly stressed that pay increases should not be eroded through taxation and therefore the threshold for entering the higher rate of tax is widely expected to increase.
Last year's budget saw the rate at which earners start to pay the higher rate of income tax increase by €2,000 to €42,000. A similar adjustment is anticipated as part of next week's budget.
There have been growing calls from within the Fianna Fáil and Fine Gael ranks to cut the amount of inheritance tax paid, especially in relation to children inheriting the family home.
Again, Mr Chambers has strongly signalled that he is in favour of this measure, stating: “There are pressing issues around the thresholds, as property prices have risen in the last number of years, and that’s why capital acquisitions tax and thresholds are something Government is considering.”
Social welfare rates have jumped significantly over the past two years, so pensioners, carers, and those on other supports may be expecting a boost again this year.
However, unlike recent years, changes will not be universally applied as Social Protection Minister Heather Humphreys has said she would like to see welfare increases targeted at those who need them most — pensioners, carers, and the disabled.
She is now pushing for €15 weekly hike in the State pension, but given that the country is near full employment, she believes that those in receipt of jobseeker's allowance should not benefit from the same bounce in their weekly payments.
Ms Humphreys also wants to extend the fuel allowance support to those over the age of 66, when people retire.
Speaking at the Fine Gael think-in recently, she did not want to see “old people in their home afraid to turn on the heating”.
Currently, anyone over the age of 70 can receive the €33-a-week fuel allowance, provided they do not have an income of more than €512 a week for a single person, or €1,024 for a couple.
Green Party leader Roderic O'Gorman gained attention when he floated the idea of a once-off €560 child benefit payment for parents upon the birth of a new child. Others within the Coalition are pushing for a repeat of a double child benefit payment before Christmas. Both measures appear to be still on the table.
While parents have benefited from a reduction of up to 50% in childcare costs over the last two budgets, it is unlikely that next week's budget package will include yet another subvention to bring down fees. Instead, Mr O'Gorman has stressed the need to bolster core funding for childcare providers as well as invest further in Deis and disability services.
Without going into specifics, Taoiseach Simon Harris also said the Government "can do exciting, impactful things in Budget 2025 to help when it comes to child poverty”.
Education Minister Norma Foley is strongly pushing for an extension of the Free Books Scheme up to Leaving Cert level.
It is estimated that the final cost of the expansion could set the exchequer back up to €43m a year, whereas it cost €68m to deliver free books for junior cycle.
Ms Foley also seeking funding for an extra 1,500 SNAs.
The renters' tax credit is expected to increase to €1,000.
Housing Minister Darragh O'Brien confirmed that he has been in discussions with Mr Chambers to increase the tax credit.
Should an extra €250 tax credit be paid out this year, it would allow renters to claim back €1,000 for this year with the credit increased to €1,000 in 2025 as well.
"Rents are too high," Mr O'Brien said. "That is why we are focusing on delivering more cost rental, and cost rental at scale — but for those who are in the rental market, the renters tax credit really helps them."