- USC rates for lower to middle income earners to be reduced by 0.5%
- Help to Buy Scheme announced for first-time, newly-built home buyers
- Welfare payments to increase by €5 per week
- Increase in thresholds for Capital Acquisitions Tax (Gifts/Inheritance)
Increase in Disposable Income per annum (Household Examples)
Two Married Public Sector employees with 2 Children
Note: no homecarer’s credit.
Over age 70 or Medical Card Holder: Total Income <€60,000
- €0 to €12,012 @ 0.5% (cut from 1%).
- €12,013 to €18,772 @ 2.5% (cut from 3% and ceiling increased from €18,668 to €18,772).
- €18,773 to €70,044 @ 5% (cut from 5.5%).
- Medical card holders and people aged 70 years and over whose combined income does not exceed €60,000 will now pay a maximum USC rate of 2.5% (cut from 3%). Those with income over 60,000 will be liable to the standard USC rates.
Home Carers Credit - an increase in the Home Carer Tax Credit from €1,000 to €1,100.
Self-employed - earned Income Tax Credit increased by €550 to €950.
Help to Buy - a new incentive was announced to help first-time buyers fund the deposit.
- There will be a rebate of income tax paid over the previous four years up to 5% of the purchase price up to €400,000.
- Where new homes are valued between €400,000 and €600,000 the maximum relief, €20,000, will continue to be available.
- The house must be a new build and applicants must take out a mortgage of at least 80% of the purchase price.
- This Scheme will run until the end of 2019.
Interest Relief on houses: Deduction available for qualifying interest payments on money borrowed to purchase, improve or repair residential rental property is being increased from 75% to 80%. This measure will apply to both new and existing mortgages.
Existing home owners
- Home renovation scheme extended for two years to end of 2018.
- Rent-a-Room income ceiling up by €2,000 (to €14,000).
- €5 increase in all weekly social welfare payments.
- State pension will rise by €5 from March per week.
- Christmas bonus for those on social welfare will rise to 85%.
- Jobseekers between 18-24: increase of €2.70 from €100 per week to €102.70 per week.
- €100 increase in Home Carers' Credit to €1,100.
- Medical card for all children who receive domiciliary care allowance.
Tax-free thresholds (Capital Acquisitions Tax) - the lifetime tax-free threshold applying to gifts and inheritances:
- From parents to children is being raised from €280,000 to €310,000.
- Made to parents, siblings, nieces, nephews or grandchildren is being raised from €30,150 to €32,500.
- Made to all others (except spouses and civil partners who are exempt) is being raised from €15,075 to €16,250.
- €25 cap on prescription charges for over 70’s reduced to €20 from 1 March 2017.
- Cigarettes – increased by 50 cents per packet.
- DIRT (Deposit Interest Retention Tax) will be reduced by 2% each year until 2020 (from 41% to 33%). This is a form of tax on interest earned on bank accounts.
- Additional €105m to enable 15,000 more households to avail of the Housing Assistance Payment Scheme.
- New relief from carbon tax for solid fuels announced.
- Sugar Tax: announced a possible tax on sugar/sweetened drinks in April 2018 (to be confirmed).
Economy & jobs
- 9% VAT rate for tourism and hospitality industry to remain.
- Start Your Own Business Scheme to be extended for 2 more years.
- New loan fund for farmers announced.
- The farmer’s flat-rate addition will be increased from 5.2% to 5.4% with effect from 1 January 2017. The flat-rate scheme compensates unregistered farmers for VAT incurred on their farming inputs.
- €1,270 income tax credit for fishermen.
- Public Service Employment: 4,500 additional front line staff, including Gardaí (800), nurses and teachers (2,400), will be recruited.
With over 40 years' experience in the industry, we have seen many Budgets and know how they can affect our customers. Our Consultants are highly trained experts. If you require additional advice on your finances following the Budget, specific to your situation as a Public Sector employee, you can request an appointment with an expert Cornmarket Consultant by clicking here. Alternatively, phone our dedicated customer contact team on (01) 477 5118
Please note: there may be further changes to the above following the Finance Bill. Every effort has been made to ensure that the information provided here is accurate and up-to-date (11th October 2016). The information provided is of a general nature and may not address the specific circumstances of a particular individual. Cornmarket does not accept any liability arising from any errors or omissions.