Budget 2021: €4bn for health, €500m for social houses, more doctors, gardaí and teachers to be hired

Cash for businesses forced to close and funding for public services among priorities

Minister for Finance Paschal Donohoe:  Ministers agreed that the Christmas bonus would be paid to all social welfare recipients, with the eligibility criteria widened to allow some recipients of the Pandemic Unemployment Payment to receive the bonus. Photograph: Dara Mac Dónaill

Minister for Finance Paschal Donohoe: Ministers agreed that the Christmas bonus would be paid to all social welfare recipients, with the eligibility criteria widened to allow some recipients of the Pandemic Unemployment Payment to receive the bonus. Photograph: Dara Mac Dónaill

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Cash supports for businesses forced to close during the pandemic, an extra €4 billion for the Department of Health, €500 million extra for social housing as well as funding to hire more doctors, gardaí, teachers and special needs assistants will be among the priorities announced by the Coalition when it unveils its first budget on Tuesday.

A massive package of State supports for individuals, businesses, long-term capital investment and more cash for public services will form the basis of Budget 2021, which will see the Government borrow as much as €19 billion next year to prop up the ailing economy.

Late on Monday night, Ministers agreed that the Christmas bonus would be paid to all social welfare recipients, and that the eligibility criteria would be changed to enable 90 per cent of current recipients of the pandemic unemployment payment (PUP) to receive the bonus if they remain unemployed until early December.

The budget is also expected to include a new scheme to support the cash flow of companies forced to close due to Covid-19 restrictions, allowing them to claim expenses against income or corporation tax in advance. The payments will be capped at €5,000 a week and last for the period of forced closure.

Budget 2021

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Events and hospitality

Other business supports will also be extended, with specific grants for sectors such as events and hospitality, while the wage subsidy scheme will now run until the end of 2021. The VAT rate for hospitality will fall from 13.5 per cent to 9 per cent.

There will a large package of green measures, including a home retrofitting scheme. Vehicle registration tax and motor tax will be reformed to incentivise electric and low-emission cars, and penalise polluters, with about 10 per cent of motorists facing higher bills.

The Government will also move to bolster the arts sector with a range of new support schemes and grants designed to counteract the damage caused by Covid-19. There will be a separate live entertainment scheme worth “tens of millions”, sources say, for venues that have had to cancel gigs because of restrictions.

Another similar scheme worth about €5 million will be rolled out, but this will be in place for school, college and local theatre events that are affected by the pandemic.

There will also be funding for an extra 600 gardaí, and another 500 civilian staff, and also for 1,000 extra special needs assistants and 400 additional special education teachers.

It is also expected that a significant package of new funding for housing, including €500 million for social housing directly built by local authorities and approved housing bodies, will be announced.