By Sinéad Farrelly & Rachel D’Arcy
This year’s budget announcement has seen an increase for a lot of people in how much money they take home with many welcoming some of the changes made.
In the social welfare pot there has been an increase of €5 per week to all state benefits including disability, job seeker and carer’s allowance. There has also been an increase to the Christmas bonus for social welfare recipients equal to 85% of their weekly payments, a 10% increase on last year.
Health has also seen a big increase, with it now at its largest recent budgetary allowance at €14 billion with an additional €497 million being given to Minister Simon Harris’ department this year – something which finance minister Michael Noonan said came “with great responsibility”.
This included €40 million to be sectioned off for disabilities and another €35m for mental health.
Within that, an additional €15 million has been awarded to the National Treatment Purchase Fund (NTPF) so as to try and tackle the bed waiting list epidemic that is currently hitting Irish hospitals, RTÉ reported last month that there were almost 300 patients waiting on trolleys. The money for the NTPF will then rise to €50 million in 2018.
The health budget has also seen a boost for nurses with funding for an extra 1,000 nurses to be hired next year. Minister Simon Harris will be speaking with recently graduated nurses later this week to set up an initiative on graduate nurses.
Medical cards will now be provided to 10,000 children in receipt of the domiciliary care allowance while the prescription charge cap for those over the age of 70 is being reduced from €25 to €20 from March 1st.
Higher education also received an increase in this year’s budget with an additional €36.5 million to be added to the pot, which is the first time in years that higher education has seen an increase in the budget. However, many, including the Union of Students Ireland (USI) are saying that this is falling short of the €100 million which is needed to properly boost the sector.
This year’s budget also saw a new full maintenance grant worth up to €6,000 being created for postgraduate students who fall into the lowest income bracket.
In a bid to tackle the ever increasing student housing crisis which has hit Dublin, the government have increased funding for their ‘rent a room’ scheme by €2,000. Anyone who rents a room in their house to a student can now earn up to €14,000 tax free, up from €12,000 last year.
Cigarettes have risen by 50 cent a packet, meaning that this is the third year in a row that smokers have been hit with an additional tax. This means now that a packet of 20 cigarettes will set the consumer back €11. Alcohol prices will remain the same. There has also been no additional duty added to the cost of petrol or diesel, meaning that the cost of driving a car will stay much the same, or less, as the commercial motor tax system has been overhauled. There will now only be five bands of tax in comparison to 20 previously, meaning that some individuals will now pay as little as €92, with an upper limit of €900.
As expected, Ireland’s low corporation tax rate of 12.5 percent remains unchanged, even in the wake of the Apple Tax controversy. The continual low tax rate for companies will mean that Ireland will remain an attractive option for multinationals looking to expand into the European market in the coming years.
From 2018, €1 billion is to be set aside in a ‘rainy day fund’ per annum. The contributions will be made over three years, and will be set aside to aid in stabilising Ireland’s economy when it is most needed. The so-called ‘rainy day fund’ was speculated on in July after Finance Minister Michael Noonan mentioned it in the Summer Economic Statement. Its main aim will be to ensure that there will be a budget surplus from 2019 on.
Similar to the budget last year, it was revealed that anybody earning less than €13,000 per annum will not be obliged to pay the Universal Social Charge (USC). The three lowest rates of USC will fall by 0.5%. These are the 1%, 3% and 5.5% rates, with Minister Noonan saying that the government, resources permitting, are committed to phasing out USC as a tax completely over time.
In line with the UK, a sugar tax will be introduced in April 2018, on soft drinks in particular. This will be introduced as part of an effort to tackle Ireland’s growing obesity problem, particularly among children. In the UK, this tax targeted fizzy drinks, and was imposed on companies according to the volume of sugar-sweetened drinks they imported or produced. It’s yet to be seen if this will be the same way of taxation in Ireland, but it’s highly likely that it will be similar.
An additional €28 million will see 800 new gardaí join the force, alongside 2,400 new teaching jobs, as well as positions for new nurses. Following the closure of many garda stations across the country, this will be a welcome measure for many communities.
The help-to-buy scheme will see first time buyers get a 5% PAYE refund for new builds up to €20,000. This has been met with criticism on social media, with many questioning why new builds are being encouraged when there are still so many ghost estates across the country.
The self-employed are set to benefit as their earned income tax credit will increase from €400 to €950. This will benefit around 147,000 self-employed individuals across Ireland. Combined with a cut in USC, this will result in the self-employed gaining an estimated 2% in take home pay.
As a whole, the 2017 budget appears to benefit many. Stay with The City to find out what the people of Dublin think of this year’s budget, and let us know how Budget ‘17 affects you in the comments.