The price of a pint will be left alone in the Budget to give hard-pressed consumers some reprieve.
However, while punters will be able to enjoy a drink for the same price this week, if they go out for a smoke it will cost them more as the tax on cigarettes is set to be hiked up again, by an expected 50c a pack. There will be no added pain for motorists as the taxes on fuel will not go up, with cuts on excise introduced last April set to continue past February, at least.
And the cost of heating your home will be eased with two energy credits worth up to €300 each, one to hit our accounts before Christmas and another then again before the end of March. The giveaway will continue across all government departments with social welfare one of the biggest winners in the tense Budget negotiations between line ministers and Michael McGrath.
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There will be double welfare payments as part of the cost of living package, on top of a double payment again at Christmas. Social Protection Minister Heather Humphreys fought for old people, arguing she didn’t want them to be afraid to turn on their heat.
Agreement was reached last night to expand the fuel allowance bands so more pensioners will qualify. The pension will go up too, by at least a tenner a week, but the battle to get it up to €20 is likely to be lost.
The Government will say it is supporting middle income families too, through an increase in the children’s allowance, although by how much has not been nailed down yet. A source close to Ms Humphreys said she also “wants to help working families on low incomes by bringing more people into the Working Family Payment”.
Workers will see more money in their pockets through an adjustment in tax bands that will mean people enter the higher 40% rate on a higher rate. It is currently €36,800 and is set to be raised to €40,000. This will be worth hundreds of euro extra a year depending on how much you earn.
Renters will finally get some reprieve in this year’s budget, with the reintroduction of the rent allowance that was scrapped after the financial crash a decade ago. This could be worth up to €400 a year, but it may be closer to €200.
Commuters will continue to enjoy cut-price fares on public transport, with the 20% slashed rate set to continue indefinitely. In Health, the free GP care scheme will see another 400,000 children included, an expansion of the promise to bring all six and seven year olds under the umbrella.
This will see nearly half of the children in the State covered under the universal scheme, which will save parents hundreds a year in bills. This is on top of the announcement last week that hospital fees for all under 16s have now been abolished.
They were €80 a pop, up to a maximum of €800 in a year and these are now gone. The Government is set to unveil a total budget package with €10billion worth of giveaways tomorrow, with another €4billion being put aside for a rainy day in case Covid, Brexit and Ukraine throw up unexpected costs next year.
The Budget will see close to €7billion in extra spending next year, while a separate cost of living package worth almost €3billion will be announced tomorrow. This will kick in this year, while most of the other measures in the main Budget will not come into effect until 2023.
Finance Minister Paschal Donohoe and Public Expenditure Minister Mr McGrath emphasised last night that they want to give “meaningful support” to as many people as possible. They both acknowledged that the cost of living crisis is hitting people hard.
Mr Donohoe and Mr McGrath spoke to reporters on the way into crunch Budget talks with the three Government leaders last night. The money ministers said that the package is largely agreed, after “exhaustive negotiations” with their ministerial colleague - although they added that some talks will still go down to the wire tonight.
Mr Donohoe said: “We’re very much aware of the concerns that many people have at the moment. While we know these are uncertain times, we do believe we have proposals that will help with the needs of today and also help us with the further developments that could take place next year.”
Mr McGrath added: “At this point now I have concluded pretty exhaustive negotiations with all of my colleagues across government and I am in a position to recommend a set of proposals on the expenditure side to the party leaders, which I believe is fair, is balanced and which I believe will make a real difference to people throughout the country.”
The Budget and cost of living package will be presented to the Dail on Tuesday afternoon.
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