With Budget 2023 set to be revealed on September 27, Government officials and senior Cabinet ministers are finalising the details of a number of supports for people across the country amid the cost of living crisis.
It is expected that the cost of living package will be the biggest in Budget history, with measures aimed at tackling the rising bills in the areas of energy, tax and groceries. The cost of living package is expected to cost at least €2 billion and looks set to provide some relief to both businesses and households throughout Ireland.
Among supports being considered by Government ministers include a double social welfare payment, Christmas bonuses, energy credits, an increase in minimum wage, tax cuts, and more.
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What is The Budget?
The Budget is the Government's yearly plan on how it spends its money and what it decides to spend this money on. Budget 2023 will see the Government give a breakdown of how much money it expects to collect in the year ahead, and how the income will be spent across all Government departments.
Each Government department will get a piece of this expenditure, and announcements will be made about key spending areas such as housing, healthcare, etc. In 2021, the Budget was approximately €87.8bn as the Government continued to respond to the Covid-19 pandemic.
When is Budget 2023?
The Budget will be presented to the Dail on September 27 by Minister for Finance Paschal Donohoe and Minister for Public Expenditure and Reform Michael McGrath. While its exact details are not yet known, Fianna Fáil TD Jack Chambers has said there will be a “pandemic style” response to the energy and cost of living crises experienced in recent months.
Here is everything we can expect so far in Budget 2023:
Energy Credits
Households are set to receive a total of €600 to accommodate rising electricity and gas bills, which includes the €200 payment expected prior to Christmas. The Government previously confirmed that an original €200 grant would be issued to households to meet electricity expenses in winter. This measure has been followed with the promise of additional supports. The staggered €600 payment will be issued to households in separate instalments over several months under Government proposals.
Energy payments would provide immense relief towards consumers nationwide, including small businesses who are struggling with rising energy costs. A café in Crumlin previously spoke out on how their electricity bill had tripled as a result of inflation.
Minimum Wage Changes
Budget 2023 is expected to see the minimum wage increase by a further 80c bringing it to a total of €11.30 per hour. It is expected that this will be the second year in a row that minimum wage has been given a boost after officials raised the wage at the beginning of 2022 by 80c to its' current rate of €10.50 an hour.
The plans look the introduce a living wage to replace the minimum wage with the aim of it being €13.70 per hour by 2026. Tanaiste Leo Varadkar previously asked the Low Pay Commission to conduct research on how the Government can best introduce a living wage.
He said that a living wage was necessary after the turbulence employees experienced over the pandemic. However, he also said that employers should also be considered when making these changes.
Tax Cuts
The Irish Independent has reported that tax and USC cuts could be introduced as part of this year's Budget. These new measures could see people save up to €1,000 a year.
PAYE credit may also be raised by €100, from €1,700 to €1,800, which would cost €226m. Other tax cuts being considered include an increase in personal tax credits of €100 for single people and €200 for married people to €1,800 and €3,600 respectively.
Housing and Rent
Renters are expected to benefit as sources have indicated that the Department of Housing is considering a tax credit, which was removed in 2017 and could save renters up to €1,440 annually.
It is also likely that landlords will benefit as Housing Minister Darragh O'Brien signalled that an incentive would be introduced to encourage them to remain in the housing market as rental supply remains at an all-time low.
The cost of rent for new tenancies in Dublin now averages out at a staggering €2,015 per month, according to the Residential Tenancies Board rent index . The Government was criticised for not prioritising escalating rents in the previous Budget. However, Housing Minister Daragh O’ Brien has promised to address the challenges facing renters, potentially in the form of a monthly tax credit.
Social Welfare
People who receive social welfare in Ireland are reportedly amongst the hardest hit by the cost of living crisis. Social welfare rates could be increased in the coming weeks to assist people financially.
Meanwhile, predictions have been made that that all social welfare recipients will receive an additional once off payment during autumn. This would be similar to a Christmas bonus allocated last year, which saw people receive an additional €20 on their social welfare payments.
Child Benefit
A once-off child benefit payment is also being considered to support families, which is expected ahead of the Christmas season. Parents with one child could receive €280 under this proposal, while parents with two children would be entitled to €560.
Childcare
It is understood that Government is also aiming to reduce childcare costs by €200 per month next year and a further €200 per month the following year. Children's Minister Roderic O'Gorman previously said he hopes to see childcare fees fall by 50 per cent over the next two years.
He told RTE's Claire Byrne: "We want to see a 50% average cut in childcare fees across this Budget and the next Budget."
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