What social welfare and tax changes come into effect from today?
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A raft of social welfare and income tax changes will kick in from today as measures from Budget 2025 come into effect.
Announced by the previous coalition Government in October, the Finance Bill to give effect to many of the changes announced in the Budget was rushed through the Dáil before Taoiseach Simon Harris called the general election for November 29.
The Budget was widely seen to be a “giveaway budget” to try to woo the electorate ahead of calling the election. As is often the case, many of the changes announced in the Budget don’t take effect until the new year so many of the measures that will benefit people only take effect from today.
Under the provisions of Budget 2025, the maximum weekly rate of Maternity Benefit, Adoptive Benefit, Paternity Benefit and Parent’s Benefit will increase by €15 from January 1.
All other weekly social welfare payments will increase by €12 with proportional increases for qualified adults and people on reduced rates of payment.
Furthermore, the newly renamed Child Support Payment, formerly the increase for a qualified child, also increases from this month by €4 for children under 12 and by €8 for children aged 12 and over.
The Working Family Payment income limits will increase for all family sizes by €60 a week while the Domiciliary Care Allowance will increase by €20 a month to €360.
From January, carer’s benefit will be extended to people who are self-employed while carer’s allowance will become a qualified payment for the fuel allowance.
If you are getting the State Pension (Non-Contributory), Disability Allowance or Blind Pension, the amount that is not taken into account when you sell your home to move into care will increase from €190,500 to €337,500.
Turning to employment programmes, people on the Community Employment (CE) Scheme, Tús and the Rural Social Scheme will get an increase of €12 a week while people on the Work Placement Experience Programme will get €24 a week more.
The Fuel Allowance means test disregard for people aged 66 and over will be €524 for a single person and €1,048 for a couple from today. The national minimum wage also rises today, by 80c to €13.50 an hour.
A slew of changes to income tax also take effect for this year, including the standard rate income tax band — the amount you can earn before paying the higher rate of tax — increasing €2,000 to €44,000.
The 4% of USC has also fallen to 3% while some tax credits increase from today including the personal, employee and earned income tax credits.
From today, there is an increase in the amount that employees can be given in vouchers or other non-cash benefits tax free from €1,000 to €1,500.
Another measure that takes effect from today is the reduction in the VAT charged for the installing of heat pumps from 23% to 9%.
Today also sees the weight carriage ratio for electric commercial vehicles change from 130% to 125% to enable them to qualify for the VRT rate of €200.
Separately, VAT registration thresholds will increase to €85,000 for goods and €42,500 for services from January 1, 2025.