What’s in the budget for Ireland’s under-35s?

The Government has unveiled a budget package worth €14 billion aimed at tackling the cost of living and planning for future shocks. But what’s in it for people under the age of 35?

Students and those under the age of 26

There will be a €1,000 reduction in the student contribution fee for higher education students eligible for the free fees initiative. Student grants will also increase by up to €342 from January.

There will be an increase to the postgraduate fee contribution grant from €4,000 to €5,000, and a once-off reduction of 33 per cent in the contribution fee for apprentices in higher education.

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In addition, more young people will qualify for cheaper public transport fares under new changes. The change will see 24- and 25-year-olds becoming eligible for the Young Adult Card for the first time. The card allows half-price fares on public transport and with participating commercial operators. For those above 26, the 20 per cent reduction in public transport fares will apply until the end of next year.

Workers and minimum wage

The income tax package is slightly larger than had been expected, with €1.3 billion being put aside. As expected, the rate at which people pay the higher rate of tax is going up. The standard rate income tax cut off point is increasing by €2,000, so people will now only pay the higher rate of tax at €42,000.

The 4.5 per cent universal service charge (USC) rate is also being cut to 4 per cent, the first reduction in USC rates in five years. As of January 1st, the national minimum wage will increase by €1.40 per hour to €12.70 per hour. There will be an increase in the ceiling for the 2 per cent rate of USC of €2,840 from €22,920 to ensure that a full-time adult worker who benefits from the increase in the hourly minimum wage will remain outside the top rates of USC.

Renters

A big outstanding question was around what the Government would do with the rent tax credit, which was worth €500. This will now increase to €750. Parents who pay for their student children with tenancies will also be allowed to claim the credit. Three €150 energy credits will also be rolled out. One will be delivered before Christmas, the other two in early 2024.

Parents

It’s mostly good news for parents in Budget 2024, although cuts to childcare costs will only kick in much later in the year in 2024. There will be a double payment of child benefit before the end of the year. There will be a €4 increase in the weekly welfare rate for a qualified child. Child benefit will be extended to 18-year-olds who are still in full-time education.

On the tax side, there will be a €100 increase in the single person child carer credit. In schools, the free school book scheme will be extended to secondary schools, for those on the junior cycle. Fees will be waived for school State exams next year. On childcare, there will another 25 per cent cut on costs – but not until next September, when the hourly subsidy will be increased from €1.40 to €2.14.

Younger people on welfare payments

There will be, as has been widely flagged, a €12 increase in weekly payments for pensions and those in receipt of weekly welfare payments. Other measures announced include a €300 lump sum payment for 370,000 people in receipt of the fuel allowance. This will be given before Christmas. There will also be a €200 lump sum payment for those in receipt of the living alone allowance, delivered this winter.

There will be a double payment for those in receipt of child benefit, delivered this winter. For welfare recipients, there will be a Christmas bonus and another double week in January. There will be a double payment for those on the foster carer allowance, to be given this winter.

Finally, those in receipt of the carer’s support grant, the disability allowance, the blind pension, the invalidity pension and domiciliary care allowance will also receipt a €400 lump sum this winter. Beyond this, in the normal recurring social protection package, the Government will spend more than €1.3 billion, and weekly rates will increase by €12.

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Mortgage holders

The Coalition also announced new detail on a scheme for mortgage holders, which will apply to those hit by interest hikes. Minister for Finance Michael McGrath said the mortgage interest tax relief scheme will last for only a year. It will apply to homeowners with an outstanding mortgage balance on their house of between €80,000 and €500,000 as of December 31st, 2022.

The relief will be made available on the increased interest paid on the mortgage in the calendar year of 2023 compared with that paid in 2022. It will be capped at €1,250.

The Government estimates that about 165,000 mortgage holders will benefit and that it will cost €125 million. On the face of it, it looks like a more expansive scheme than had previously been flagged, but some people will undoubtedly lose out if they don’t meet those specific criteria.

Women

No official announcement has been made yet, but the Department of Health is planning to extend free contraception – currently available to 17- to 30-year-olds – to 31-year-olds. An additional €12 million in funding has been announced to tackle violence against women, including funding for the new Domestic, Sexual and Gender-Based Violence Agency due to be established in January 2024.