Budget 2024: From cost of living to housing, tax breaks and cigarettes – everything you need to know

Renters are also in line for further credits, while there will be mortgage relief for those hit by soaring interest rates and reductions in childcare fees.

The minister said inflation and interest rate increases have had a major bearing on the budget measures.

The total package is €14bn, Mr McGrath said.

Here, the Irish Independent will give you a detailed breakdown on how the Budget affects each sector of society.

Cost of living

The Government has announced a cost-of-living package of one-off measures costing €2.3bn alongside today’s Budget.

Included in this is the following, announced by Public Expenditure Minister Paschal Donohoe:

• Energy credit of €450 across three instalments of €150 between the end of this year and next April
• Double child benefit
• Christmas bonus of social welfare payments
• Once-off double payment of all social welfare payments in January
• €400 lump sum to recipients of the working family payment
• Those on the Living Alone Allowance will receive an extra €200 payment
• Once-off payment of €400 to be made before Christmas to recipients of Carer’s Support Grant, Disability Allowance, Blind Pension, Invalidity Pension and Domiciliary Care Allowance.

Housing, rent and mortgages

• The rent credit, now €500, is set to reach a new level of €750. Parents who paid for student children can now avail of the rent credit – which will be backdated for this year and last year.
• Landlords will received tax relief at the 20pc standard rate on a proportion of their rental income. This would see rental income of €3,000 for 2024, €4,000 for 2025, and €5,000 for 2026 and 2027 disregarded at the standard rate – as long as landlords stay in the market for that full four-year period.
• Temporary mortgage interest tax relief worth up to €1,250. The relief will be available to homeowners whose principle private residence has an outstanding mortgage of between €80,000 and €500,000 as of December 31, 2022.
• Help to Buy scheme extended to 2025.
• Applicants of local authority affordable purchase scheme will now be able to avail of Help to Buy.
• €1.9bn in capital funding to deliver 9,300 new-build social homes, €265m to deliver 6,400 affordable homes; €242m for homeless services and accommodation, with €35m going to the Housing First initiative.
• €90m for the retrofitting of social housing next year; and €207m euro in funding aimed at bringing vacant and derelict units back into use.

Tax cuts and minimum wage

Taxpayers are expected to be around €800 better off thanks to cuts to the Universal Social Charge (USC) and tweaks to income tax bands to be announced in today’s Budget.

• The top rate of 40pc income tax is to increase by €2,000 to €42,000 in the Budget.
• PAYE tax credits and other related credits will increase by €100.
• The USC of 4.5pc rate will drop to 4pc, saving the average worker €235 a year.
• The ceiling for the 2pc rate is to go up by €2,800 – saving those workers an additional €56 a year.
• Single person on €46,000 will be more than €2,000 better off after income tax and USC changes, the minister said.
• €1.40 increase in the national minimum wage, bringing it to €12.70 an hour.
• PRSI rate will increase by 0.1pc from October next year.

Social Welfare

• All social welfare rates will increase by €12 a week.
• Child benefit payment to be extended to 18-year-olds in full time education.

Public transport

• Public transport cuts of 20pc are expected, as well as the young adult Leap card, which gives 18 to 24-year-olds half-price public transport, are both set to be extended.
• Rollout of further services via BusConnects, Connecting Ireland and the New Town service plans.
• Mr Donohoe said funding would support the construction of the MetroLink, the Cork Commuter Rail project, investment in electric and hybrid-electric buses and infrastructure required for new bus and rail fleets.
• There would be €1.3bn allocated for the development and renewal of the roads network.

Childcare

• Children’s Minister Roderic O’Gorman was able to secure another average 25pc reduction in childcare fees on top of last year’s through an increase in the subsidies paid under the National Childcare Scheme.
• Parents will be forced to wait until September of next year for reductions in their childcare fees.
• Parents benefit will be extended to nine weeks from August 2024.
• Statutory foster care rate to rise by €75 per week for children under 12 and €73 for children over 12.

Students

• There will be a once-off student contribution fee reduction of €1,000

Cigarettes and alcohol

• Smokers are set to be hit with a 75c increase in the price of cigarettes, rising to €16.75.
• The Government is also expected to announce its commitment to taxing e-cigarettes and vapes, but this will need legislation which will be enacted at a later date.
• Tax expected on e-cigarettes from next year’s budget.
• No changes are expected in the price of alcohol.

Climate

• Tax disregard for income received by households who sell residual electricity from micro-generation back to the national grid will be doubled.
• Zero Vat rate on supply and installation of solar panels extended to schools from 1 January next year.
• €380m will be provided for community and residential energy schemes to reduce greenhouse gas emissions and energy bills.

Schools and third level

• There will be an extension of the free school book scheme to the first three years of secondary school.
• Free copybooks and calculators also among measures.
• Hot school meals to be extended to 900 primary schools by next April.
• The Budget will also provide funding for an additional 1,200 SNAs in Irish schools.
• 300 school building projects were under way and a further 200 would commence over the course of 2024 and 2025.
• Mr Donohoe said the budget would provide for more than 740 additional teachers to support pupils with special education needs in special classes, special schools and mainstream settings.
• €60m is being allocated to “address sustainable funding” of higher education, as well as increasing capacity for medicine places.

Businesses

• 130,000 small and medium businesses will get up to half of their commercial rates back under a special €250m package aimed at softening the impact of an unprecedented €1.40 increase in the minimum wage.
• R&D tax credit to be increased from 25pc to 30pc.
• Targeted capital gains tax relief for angel investment to encourage funding for start ups.
• The minister will publish legislation in next week’s Finance Bill to implement the 15pc minimum effective tax rate for large companies under the OECD Pillar Two agreement. “This is a once in a generation reform to our corporation tax system,” he said.

Crime

• There will be a 25pc increase in garda overtime to tackle ­anti-social behaviour and crime in towns and cities, with funding increased from €105 to €131m.
• Funding for 1,000 new gardaí trainees and 250 garda civilian staff in specialist roles.
• Trainee gardaí will get a 66pc increase to their training allowance from Budget Day, which will rise to €305 a week from the current €184.
• €25 million euro increase in the annual garda overtime budget

Health

• The health service is to get an extra €500m next year, but the size of its budget bailout for this year is still not settled.
• The half-a-billion euro in extra funding will be used to continue tackling waiting lists, including opening, and staffing six new surgical hubs.
• There will be an increase in funding for mental health by completing the staffing of Camhs teams, and expansion of free contraception to women aged 31 and increased funding for digital health.
• A total of €1.23bn is being provided as part of the National Development Plan to deliver additional health infrastructure to “enhance the wider sustainability of our health services,” Mr Donohoe said.

Other measures

• From January 2024, audio books and e-books will have a 0pc Vat rate in line with print books, e-books are currently subject to a 9pc Vat rate.
• A total of €67m will be provided to create 16,000 craft apprenticeship programmes.
• National broadband scheme expected to reach 200,000 premises by the end of the year and said a further €348m would be invested to provide another 100,000 homes with the opportunity to connect to fibre broadband.
• The Department of Rural and Community Development has been given a Budget provision of €431m, split into €205m euro for rural development and €220m for community development
• A targeted social inclusion support of €11m will provide assistance to “new arrivals” through the Social Inclusion and Community Activation Programme.
• A further €10m will be given to protects under the Community Recognition Fund for communities welcoming arrivals from Ukraine and elsewhere.