The highlights of Budget 2021 by department
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The Government has pledged that its “unprecedented” €18bn budget package will help build a “stronger, more resilient” country.
Here are all the main points that you need to know.
Motorists will find their expenses rising from tonight, while a large investment in public transport and roads have been announced in the Budget.
The cost of petrol and diesel will go up from midnight as the Carbon Tax increases by €7.50 per tonne of CO2.
For a diesel car, that will add around €1.50 to a 60 litre filling of the tank, with around €1.30 added to the cost of a petrol fill.
Finance Minister Paschal Donohoe said that this would "create a level playing field" between newer and older cars".
However the VRT relief for plug-in hybrid vehicles will be allowed to expire as there will now be lower VRT rates for low emission cars. VRT for battery-operated vehicles will be tapered off.
Motor Tax will see its bands change, with rates staying the same for cars which are assessed on engine size and "all but the most pollutant" post-2008 cars, Mr Donohoe said.
On expenditure, the Government has committed to continuing the BusConnects, MetroLink and DART expansion programmes, as well as the purchase of 41 additional railcars. The Government will, in 2021, sign a deal to purchase 600 electric/battery-operated carriages for the DART+ programme, as well as signing the Railway Order for the Maynooth section of that plan.
Major roads will also be progressed, including:
- N4 Collooney to Castlebaldwin, Sligo
- N22 Ballyvourney to Macroom upgrade
- N5 Westport to Turlough N56 Dungloe to Glenties
- The Dunkettle interchange upgrade in Cork and
- A plan to introduce variable speed limits on the M50.
The cost of a packet of cigarettes is to rise to €14 at midnight, however, there have been no significant changes to income tax as part of Budget 2021.
Workers will be disappointed to hear Finance Minister Paschal Donohoe has decided to leave income tax credits or bands broadly the same, meaning no changes in payslips.
However, there will be some tax adjustments for those on the minimum wage and the self-employed.
The second USC band will increase slightly from €20,484 to €20,687 to ensure the salary of a full-time worker on the minimum wage will remain outside the top rates of the tax.
The weekly threshold for the higher rate of employer's PRSI will also increase by €4 to €398. This is to make sure that there is no incentive to reduce working hours for a full-time worker on the minimum wage.
Mr Donohoe announced that he is moving to equalise the Earned Income Credit with the PAYE credit for the self-employed by raising it by €150 to €1,650.
Farmers will also see the reduced 1% rate of stamp duty on transfers of agriculture land between family members extended. This relief has been due to expire at the end of this year, however, this will now continue until the end of December 2023.
Excise duty on a pack of 20 cigarettes will go up by 50c from midnight. This will bring the price of the most popular brands up to €14, however Mr Donohoe said this supports public health policy to reduce smoking in Irish society.
On the contentious issue of corporation tax, Mr Donohoe has announced that he is amending legislation to provide that all intangible assets acquired after today will be fully within the scope of balancing charge riles. This change will come into force from midnight.
Mr Donohoe said: "While the new rules are not expected to result in significant additional tax revenue, given the current profile of claims, they will ensure that our tax regime for intellectual property, together with the broader corporation tax regimes, remains competitive, legitimate and sustainable."
Ireland's health budget will reach over €22 billion in 2021, the largest in the history of the State.
This figure will add nearly €2 billion to core funding from this year.
In total, the system will allocate €4 billion to the health system's Covid-19 response, while the government looks to build capacity in the system.
An "immediate expansion in the health force" will be undertaken with €467 million put towards increasing health service capacity.
The spending will ensure, the Government says, that PPE is consistently available where needed, that Ireland can test 100,000 people per week and provide for the measures in the Covid-19 Action Plan.
The money will is pledged towards:
- An increase in ICU beds to 321 by the end of 2020 - up 24 on current levels and up 66 on 2020 plans.
- Acute beds increase by 1,146 by the end of 2021, with sub-acute beds rising by 135
- An increase in community beds of 1,250, including 600 new rehabilitation beds
- Five million additional homecare hours
- The implementation of the Public-Only Consultant contract
- €100 million in new disability measures including the resumption of day services
- €38 million towards mental health and €25 million for Healthy Ireland and the National Drugs Strategy
The Budget adds that access to health services and "alternative pathways" will be improved and "cancer screening prioritised".
The Government's plan also aims to replace "insofar as possible" the lost capacity and activity due to Covid-19.
Over 600 new gardaí will be recruited under today's Budget, with provision made for 500 civilian staff.
The Department of Justice will have a record €3 billion budget to allow it to "modernise, reform and Covid-equip" itself, according to Minister Helen McEntee.
The allocation sees the Department pledge to recruit up to 620 new Garda recruits, along with 500 staff who would allow gardaí focus more on frontline duties.
Justice will also spend:
- €42 million to modernise the Justice Sector through increased digital and ICT investment, including €8 million for the Courts Modernisation Programme
- €27 million for Covid-related measures
- €2.7 million in increased funding to combat domestic, sexual and gender based violence, as well as support for victims
- An extra €2 million to fund additional staffing for the Data Protection Commission and help it achieve its goal of having well in excess of 200 staff by the end of 2021
- An overall increase of €147 million in current expenditure and €51 million capital funding
The Covid measures will include €13 million for PPE for gardaí, €5.7 million for cleaning and PPE in prisons, €5.7 million for the Courts Service and €400,000 for additional domestic violence supports.
An additional €7 million will allow gardaí to "instant access to real-time, secure information on the roadside across a range of apps which enable them to scan registration plates, identify forged or false driving licences, and detect disqualified drivers, untaxed cars and stolen vehicles".
In Foreign Affairs, Ireland will open new missions in Kyiv, Rabat and Manila in 2021.
A €50m package to help support the live entertainment sector and €2m for major sporting events are among the measures announced in Budget 2021.
The devastating impact that Covid has had on the arts, culture and sporting activities was acknowledged by Minister for Public Expenditure Michael McGrath in his Budget 2021 speech.
Announcing the supports to help live entertainment get up and running again with social distancing through a subsidy scheme, Mr McGrath said the Government has a responsibility to ensure that the thousand of people working in these industries are supported.
The Arts Council funding will also increase by €50m next year to €130m.
Meanwhile Sport Ireland will get a €36m increase in funding, with €7m of this going to large-scale sports infrastructure and €2m for major sporting events.
Funding to attract international sporting events to Ireland will also increase.
Mr McGrath pointed to the 260,000 people who were employed in the tourism industry before Covid and said the schemes announced as part of Budget 2021 would be vital to help the wider hospitality sector through the pandemic.
A total of €55m will be provided for a Tourism Support Scheme and another €5m for tourism product development.
The Gaeltacht and Irish language sector is to be given an extra €14m next year, bringing the total allocation to over €78m. This incluse €8m for Údarás na Gaeltachta, €1.7m for An Foras Teanga and €1.3m for the 20 year strategy for the Irish language.
Teilifís na Gaeilge is to receive €3.5m.
A carrot and stick approach has been adopted by the Government on climate change and the environment with greater spending on retrofitting homes across the country at the same time as a further €7.50 hike in carbon taxes.
Carbon tax is to be increased from €26 to €33.50 per tonne. This increase will be applied on petrol and diesel from midnight tonight, however, the hike will not be applied to home heating oil until May of next year.
Finance Minister Paschal Donohoe described the increase as "another important step in our collective efforts to decarbonise our economy".
The carbon tax is set to rise by a further €7.50 each year up to 2029 and by €6.50 in 2030 bringing the total to €100 per tonne in the next decade.
An extra €100m of the money raised through carbon taxes will be allocated to making homes more energy efficient, representing an 82% increase in funding in 2021 compared to this year.
A total of €106m has been allocated to communications including the rollout of the National Broadband Plan.
Compared to this year's allocation, an additional €16.2m in current expenditure and €240.5m more in capital expenditure is being allocated to the Department of the Environment, Climate and Communications in 2021.
During his Budget speech, Mr Donohoe cited climate change as "one of the most important priorities" for this Government.
Minister for Public Expenditure Michael McGrath said while managing Covid is "uppermost in our priorities this year and next" he said the climate emergency is a threat that will be with us long after the pandemic.
An Agri-environmental pilot scheme is among the new measures being rolled out to encourage farmers to reduce their carbon emissions and improve biodiversity.
The Department of Agriculture has been allocated €1.8bn in funding for 2021, an increase of €179 million on this year.
Funding will go towards the appointment of a new Food Ombudsman as well as a range of schemes aimed at improving the carbon footprint of those working in agriculture.
A total of €79m will be invested in new agri-environmental and other farm support measures next year.
A 33% increase in funding for the organic farming scheme, to allow it to be reopened for new entrants, has also been announced.
While €20million taken in through carbon taxes will be directed into agriculture and will fund the pilot initiative aimed at changing the approach to farming in this country.
Funding will be provided to the forestry programme though new afforestation establishment grands and forestry development supports.
Farmers will also see the reduced 1% rate of stamp duty on transfers of agriculture land between family members extended. This relief has been due to expire at the end of this year, however, this will now continue until the end of December 2023.
A further €341 million has been allocated to the Department of Rural and Community Development in 2021. This is a 7% increase and provides for an additional €15 million in capital funding to support the Rural Regeneration and Development Fund, the Town and Village Renewal Scheme as well as the Outdoor Recreation Infrastructure Scheme.
Under the Town and Village Renewal Scheme, there will be a €5 million investment in facilities for digital hubs and broadband connection points across rural Ireland, aimed at enhancing remote working capability and remote access for students.
A total of €12 billion is to be allocated to primary, secondary and third level education next year.
The funding will see the pupil teach radio decrease across primary schools; will make 1,500 Springboard places available and will allow for an increase in SUSI grants for postgraduate students.
Students will also receive a once-off grant of around €250 to recognise the difficulties Covid-19 has posed this academic year, this measure will cost €50m.
The total funding allocation breaks down to €8.9billion for the Department of Education covering primary and secondary levels while a further €3.3billion will be invested in higher education.
A record €2bn is to go towards support for children with special education needs and will see an extra 990 SNAs recruited.
The recruitment of an extra 300 teachers, on top of 265 posts to meet demographic pressures, will bring the pupil teacher ratio at primary level down to 25:1.
An extra 87 primary school teachers will be appointed to make sure schools do not lose a teacher in 2021.
Meanwhile 80 more occupational, speech and language and behavioral therapists will be appointed.
Those pursuing post-graduate education will welcome an increase in the SUSI fee grant by €1,500 to €3,500. The income eligibility threshold for the grant will also be changed.
Over 10,000 upskilling and reskilling opportunities through SOLAS and Skillnet Ireland will be rolled out. This includes an extra 2,000 Skills to Compete places for those who have lost their jobs as a result of Covid-19 and 1,500 places on new and existing training courses specialising in retrofitting.
Over 20 higher education building projects will receive €270m in funding.
The capital spend at primary and secondary level will be €740m next year, which will see the delivery of 145 school building projects.
However, €10m will still be spent on renting school accommodation.
The fallout from the Covid-19 pandemic will see Ireland's social protection spending hit over €25 billion in 2021.
That is the largest allocation the department has ever seen and comes with some increases for recipients.
The funding will allow the Department to provide almost 700,000 pensions, working age supports for 548,000 people and illness, disability and carers allowances for 424,000.
The pension age will stay at 66, pending the report of the Commission on Pensions next year.
There will be no restoration of the Pandemic Unemployment Payment, but self-employed people will be allowed to earn up to €480 a month on top of their PUP., allowing them to take up sporadic or occasional work.
Families will see a number of changes, with an additional three weeks' paid Parents' Leave announced, along with the removal of the €425 earning threshold for the One-Parent Family Payment and a weekly increase of €2 for qualified children under 12 of families in receipt of social welfare and €5 for children over 12. The threshold for the Working Family Payment for families with up to three children will increase by €10.
The Carer's Support Grant will go up by €150 to €1,850 at a cost to the Exchequer of €21.5 million.
An additional €5.5 million will be given to the Hot Meals Scheme and the waiting period for accessing Illness Benefit will be cut from six days to three.
The Living Alone Allowance will be raised from €14 to €19, the Widowed or Surviving Partner Grant will go up to €8,000 and the Fuel Allowance will go up by €3.50.
An additional €500 million will be put towards the delivery of new housing under today's Budget.
The additional funding brings to €2.8 billion the proposed spend on new housing by the government, with Housing Minister Darragh O'Brien aiming to deliver a total of 12,750 new homes to the housing stock.
Of those, 9,500 will be built, with 2,900 built directly by local authorities on public lands with 550 homes regenerated along with 800 targeted acquisitions and 2,450 leases. Approved Housing Bodies will deliver further 2,950 homes and 1,000 homes will be built through PPPs.
The Department will see the current expenditure of €2.4 billion, which is aimed to deliver an additional 15,000 HAP tenancies and 800 RAS tenancies. In total, HAP expenditure will account for €558 million.
An additional €44 million will be given to Irish Water to make infrastructural upgrades which will allow for more home building.
The Department will also put €110 million towards a new national Affordable Purchase Shared Equity Scheme for first-time buyers as will as a new funding model which will see housing bodies deliver 400 cost-rental homes.
The Serviced Sites Fund will be allocated €50 million to provide infrastructure along with €38 million for the Local Infrastructure Housing Activation Fund, along with €73 million for the National Regeneration Programme.
There will also be €60 million to deliver 10,700 adaptation grants for older or disabled people.
Additional funding of €22 million is being made towards the provision of emergency accommodation
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A massive €3.4 billion recovery fund for an economy threatened by Covid-19 and Brexit and up to €5,000 a week for businesses forced to close by Covid restrictions are part of the Government's attempt to keep businesses afloat over the coming months.
The €3.4 billion Recovery Fund is designed to allow for "specific, targeted measures" to support the economy, the Government's Expenditure Report says.
The Government has also applied for EU funding towards the costs of the Employment Wage Subsidy Scheme. The application is being made to the EU SURE fund and could see Ireland access around €2.5 billion to keep the scheme going. The EWSS is due to end on March 31, but Finance Minister Paschal Donohoe says that a similar scheme will be needed until the end of 2021.
"There will be no cliff edge to this vital scheme," Mr Donohoe told the Dáil.
The Covid-19 Restrictions Support Scheme (CRSS) will allow businesses access up to €5,000 a week if their business is forced to close by a changing of Covid restrictions.
The scheme, Finance Minister Paschal Donohoe said, will generally operate in counties where Level 3 restrictions have been announced only. Affected sectors under the current restrictions are hospitality, the arts, entertainment and food.
Payments will be made to businesses based on 10% of their first €1 million of turnover and 5% thereafter, subject to a maximum €5,000 for businesses which can demonstrate that their businesses have been impacted.
The Government will also examine how to establish an equity fund with a mandate to invest in high-innovation companies in Ireland. An initial €30 million in funding is being made available for this.
The Budget also provides €2 billion for the Covid-19 Credit Guarantee Scheme.
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- - In the region of €20 billion - of that €14bn has already been earmarked, in particular for Covid-19 supports
- - A €3bn- €5bn kickstart which will provide an additional stimulus to the economy against the dual threats of Covid-19 and Brexit, specifically aimed at businesses that have been affected by the pandemic and who may be affected in a hard Brexit scenario.
- - income tax, USC and PRSI expected to remain untouched Commercial rates waiver - likely to be extended into 2021.
- - an additional €3.5bn to respond to the Covid crisis and try to re-establish normal levels of service. €1.5bn for new beds and staff. Money for new ICU beds, as well as thousands of new staff and a €1.3bn investment in testing and tracing as part of the Covid-19 response.
- - the cost of 20 cigarettes to go up by as much as 50 cent.
- - The core rates of social welfare are due to be protected. Unlikely to be any increases for the pension or jobseekers.
- - likely to be restored to the €350 rate though altered to allow self-employed to earn €480 a month through their work, while still claiming the payment, as well as three weeks paid parental leave on top of the existing two weeks.
- - One week bonus will be available to 400,000 people in receipt of the PUP and jobseeker's payment.
- - Continuation of the Help-to-Buy scheme, a new affordable housing plan and significant investment to fund directly-built homes. Expected that 12,750 new homes will be added to the social housing stock, the majority of which will be built and the rest acquired.
- - Carbon tax to be raised by €7.50 per tonne and spending on greenways will rise to €50m. The cost of filling a 60 litre tank of diesel will go up by almost €1.50 while for petrol it will be around €1.30
- - a 5% increase in its core spend, which will translate to 2,000 new posts - around 990 extra special-needs assistants (SNAs), 400 more special-education teachers and approximately 600 mainstream teachers across primary and secondary schools.
- - Grants of up to €10,000 for music and theatre venues.
- - to get a cut in the Vat rate from 13.5% back down to 9%.