Budget 2017: The top 5 winners and losers
First time home buyers, parents and pensioners benefit while smokers face increase
The Government has heralded Budget 2017 that it was divided “between increased investment in public services and tax cuts.
However, as always, some have benefitted more than others.
Top five winners of Budget 2017:
1. First time home buyers
A help to buy scheme for first time buyers will involve a 5 per cent PAYE rebate of up to €20,000 over four years on new homes worth up to €400,000. Pro rata rates will apply to lower priced houses and no rebate will be paid on house purchases in excess of €600,000.
Other measures to help the housing crisis include €1.2bn funding for social housing units, the extension of the home renovation scheme by two years, the increase in the rent-a-room income ceiling by €2,000, a €28m increase in funding for emergency accommodation.
2. Social welfare recipients
All social welfare payments will rise in March including jobseeker’s benefit and allowance, carer’s allowance and disability benefit. There will be a €5 increase in the State pension. Increases are subject to the passage of the Social Welfare Bill. The payment of an 85 per cent , up from 50 per cent in 2015. The Christmas bonus will be reinstated to 85 per cent, which equates to €159.80 for those on welfare and €196 for pensioners. Pensioners over 80 will also see the monthly prescription cap levy reduced by €5.
3. Working parents
A new affordable childcare scheme for all children aged between six months to 15 years will be provided from September next year. It will provide means-tested subsidies, based on parents’ or guardian’s income and paid directly to registered child-minders or childcare providers. There will also be a universal childcare subsidy for the parents or guardians of children aged between six months and three years, targeted at those on the lowest incomes, from next September. Funding for this scheme is €35 million next year.
4. PAYE workers
Cuts to the bottom three universal social charge (USC) rates will be the key tax measure that delivers changes to people’s income.
The lower 1 per cent USC rate which applies on the first €12,012 of income has been cut by 0.5 of a point. This is worth €60 a year to anyone who pays USC.
The next 3 per cent rate which applies on the next €6,660 of income up to €18,772 has also been cut by half a point to 2.5 per cent. This will deliver another €34 a year to anyone earning €18,722 or more a year.
The main USC rate of 5.5 per cent has also been cut by half a point to 5 per cent. This rate applies on incomes between €18,772 and just over €70,000. This delivers more substantial gains to middle and higher earners.
The total gain for someone earning €70,000 from the USC cuts is just over €355 a year, for someone earning €45,000 the total gain is €230 per year.
5. Alcohol drinkers
Prices were not increased on alcohol which is one of the past budget’s old reliables . The National Off-Licence Association said the decision to not increase excise duty on alcohol would offer some relief to the difficulties currently being faced by the independent off-licence industry in the State.
Top five losers of Budget 2017
The only taxation increase was cigarettes. The price of cigarettes will increase by 50 cent from midnight tonight with a pro-rata increase on tobacco. This will bring the price of a 20-pack of cigarettes to €11. Tobacco groups have argued that the move makes smuggled cigarettes more attractive. It was welcomed by anti-smoking group Ash Ireland which said it needed to be increased by 50 cent each year to achieve a smoking free Ireland.
2. Minimum wage earners
The minimum wage will increase by 10 cent to €9.25 an hour. This will add less than €4 a week to the take home pay of a full-time worker on the minimum wage. Labour Senator Ged Nash said the Government’s 10 cent increase was “ a slap in the face” for 70,000 of Ireland’s lowest paid workers. “The Government has failed to meet its own commitments to raise the minimum wage to €10.50,” he said.
3. Fizzy drink consumers
Tax on sugar-sweetened drinks will be introduced in April 2018 after public consultation to coincide with similar measures in the UK. “It is of utmost importance to me that such a tax is as effective as possible, as fair as possible, and minimises the administrative burden on business,” Minister for Finance Michael Noonan said.
4. Public Sector workers There is no money allocated for additional rises for public sector pay next year over and above those allowed under the Lansdowne Road deal. Minister for Public Expenditure and Reform Paschal Donohoe announced the provision of €290m to meet public service pay costs next year despite growing calls from public service groups for an acceleration of wage restoration .
This is keeping with the amount required in 2017 to implement the measures set out in the Lansdowne Road accord which will see public service personnel earning less than €65,000 receive a payment of €1,000 next September.
5. Unemployed youths:
The means tested Jobseeker’s Allowance for young people received far smaller rise than the €5 for other welfare rates. Those aged 18 to 24 will receive an extra €2.70 per week as the rate rises from €100 to €102.70 while those aged 25 will receive €3.80 extra per week from €144 to €147.80. The rate for jobseekers aged 26 and over will increase by €5 from €188 to €193. The National Youth Council said it was a “mean-spirited and discriminatory budget that unfairly singles out the young”.