A welcome boost of €500 could be on the way for thousands in Budget 2023 as Government officials are considering a change to income tax bands.
The increase could see workers earning an annual salary of €50,000, taking home at least €500 extra. As part of Budget 2023, Minister for Finance Paschal Donohoe is expected to increase the 40 per cent income tax band by €2,500, meaning workers won't have to pay the higher tax rate on any earnings below €39,500.
The new measures would also see a 20 per cent tax rate being applied to all income under €39,300. In addition, tax credits are also predicted to be announced in Budget 2023.
Read more: Budget 2023: How possible measures could impact people on minimum wage
Here's the latest changes that are expected in Budget 2023:
Tax Credit for renters and households
A tax credit may also be on the cards for renters, which could save them up to €1,440 annually and a reduction in tax paid by landlords in an effort to stop landlords from leaving the rental market in Ireland. Meanwhile, ahead of the Budget, property owners have also been calling out for their tax rate to be reduced to 25 per cent from 50 per cent.
Minimum Wage boost in 2023
There's also good news on the way for minimum wage workers, with Government to increase minimum wage to €11.30 per hour by January 2023. The minimum wage currently stands at €10.50 an hour, although employers are legally entitled to pay 18 and 19 year old workers at sub minimum rates worth 80 and 90 per cent of the €10.50 total
The Government is also expected to approve plans to introduce a living wage, a rate of pay that will allow working adults to have a comfortable standard of living. The living wage would eventually replace the minimum wage in several years’ time and is proposed at €13.70 an hour.
Social welfare package
Meanwhile, a large social welfare package in Budget 2023 is also expected to be announced on Budget day on September 27. An increase of €15 had been discussed, but it is believed that a €10 increase could be a more realistic expectation.
A bonus social welfare payment made before December is also under consideration, which would be separate from the Christmas bonus. Finance Minister Paschal Donohoe is also working on a proposal to increase the tax-free bonus amount an employer can give an employee from €500 to €1,000 annually.
At the moment, employees can only receive a benefit of €500 in value which is tax-free each year from their employer. The benefit is not strictly reserved to cash, it can also be received in the form of vouchers or cards, which can be used to buy goods or services.
Other proposals also being considered in Budget 2023 include a double payment of social welfare, Child Benefit and a one-off double Working Family Payment.
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