Budget 2018 Roundup

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The 2018 budget has reduced taxes for earners right across the board as Paschal Donohoe, Minister for Finance, has delivered the first Fine Gael budget under the regime of Leo Varadkar.

Budget 2018 sees the two Universal Social Charge (USC) rates decrease.  The 2.5% rate of USC will decrease to 2%, with the ceiling for this level raised from €18,772 to €19,372.  The higher 5% rate will decrease to 4.75%.

The rate at which taxpayers pay the higher rate of income tax of 40% will rise from €33,800 to €34,500.

Self-employed people will also reap tax benefits as the Earned Income Credit will increase by €200 to €1,150 a year.

During his campaign to become Taoiseach, Leo Varadkar vowed to transform Fine Gael into a party for “people who get up early in the morning”.  While these changes to tax will favour low income earners and the so-called “squeezed middle”, there are other changes announced in Budget 2018 which will benefit those receiving social welfare.

All social welfare payments are set to increase €5 a month from the end of March.

The One Parent Family Payment and Job Seekers Transitional Scheme will both increase by €20 per week.

People receiving social welfare long term will also receive an 85% Christmas bonus again this year.

Housing

In an effort to combat the housing crisis, Minister Paschal Donohoe has allocated €1.83 billion to housing in Budget 2018.  This should, the Minister says, lead to an extra 3,800 social housing units being built by local authorities and approved housing bodies next year.

The Housing Assistance Payment (HAP) Scheme was increased by €149 million.  It is estimated this will help an additional 17,000 families next year.

Funding for the homeless services will increase to €166 million, up €18 million from last year.

Health

Minister Donohoe is increasing the budget for the Department of Health to €15.3 billion for next year, a change of €685 million.

Medical card holders over 70 will now pay just €2 for prescriptions, down from €2.50.  The monthly cap on prescriptions will decrease from €25 to €20.   

There will also be an additional 1,800 staff hired in the health sector.  These roles will be created in services across mental health, disability, primary care, and community care sectors.

Recruitment

The Department of Education is set to recruit 1,300 teachers next year.  This will mean there will be 1 teacher per 26 children in every classroom.

1,000 Special Needs Assistants positions are to be created before September 2018 as €1.7 billion will be invested in Special Needs Education.

An additional 800 Gardaí will also be recruited.

Budget 2018 is not, however, all give and no take.

A new “sugar tax” will be introduced from April 2018.  A tax of 30c will be applied to drinks with eight grams of sugar or more per 100 millilitres.   There are for instance 10.6 grams of sugar per 100 millilitres of Coca-Cola.

An added tax of 20c will be added to mineral drinks with between five and eight grams of sugar per 100 millilitres.

Cigarette prices are set to rise by 50c from midnight on Wednesday 11th October, making the main brands like John Player, Marlboro and Silk Cut €12 a packet.

Smokers on the streets of Bray were not impressed with the hike in prices.

“I’ve been smoking for thirty odd years now and I remember when you could get 10 [cigarettes] for about €2 or €3,” says Vicky Byrne, 52.

“I think it’s mental now that you’ll be paying almost €16 for a pack of 28 John Player Blue. It will probably make a lot of people consider those electric cigarettes. I don’t think many people around will last paying those prices.”

“I think it’s ridiculous at this stage,” vents Shane Petrassi, 42 from Greystones.  “They’ve hiked up the cost of smokes every year for as long as I can remember.”

Taoiseach Leo Varadkar described the budget as a “good budget” with “no fireworks, no big bonanza”.  It was also announced in Budget 2018 that Varadkar’s “Strategic Communications Unit” will cost €5 million in 2018.  The unit was set up when Varadkar succeeded Enda Kenny as Taoiseach and aims to communicate government messages to the general public.  The unit has been labelled a “spin machine” by many opposition TDs, including the Fianna Fáil spokesperson for housing, Barry Cowen.

 

By Louise Burne and Andrew Barnes

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