Budget 2023 update: Social welfare changes, Child…

Budget 2023 update: Social welfare changes, Child Benefit boost, housing tax break and more to be considered

As the cost of living crisis continues, households across the country will be eagerly awaiting the announcement of Budget 2023 in the coming weeks.

The Government is considering a range of new measures aimed at tackling rising inflation in the hopes of bringing some relief to those currently struggling.

Budget 2023 is set to be one of the biggest packages to date, with €6.7 billion set aside.

Some of the new measures on the table at the moment include an increase in social welfare payments, cuts in taxes, and a double child benefit payment.

Here is what we know so far on what to expect from Budget 2023.

Purse full of money, close up (gettyimages.ie)

Social welfare

The Government are also expected to announce a hike of at least €10 in pension and welfare payments .

Finance Minister Paschal Donohoe published the Tax Strategy Group papers earlier this year, which stated plans to be examined by the Government during the last month of budget negotiations.

All of the social welfare packages outlined in the Tax Strategy Group papers include a double-digit increase in weekly payments ranging from €10 to €15.

The first of which recommends a €15 increase across all payments, which would cost the State around €1.1 billion.

This would mean the majority of people receiving social welfare payments would receive €223 per week, while a person on the State pension would see their pay packet increase to €268 per week.

Another option under consideration is a €10 increase in all welfare payments along with a €10 hike in the Fuel Allowance and Living Alone allowance.

Child Benefit

The Government is also to consider a once-off double payment of the monthly €140 child benefit sum as part of a cost-of-living package to be announced on Budget day.

Those in receipt of a child benefit payments could be in line for a €280 one-off payment if they have one child or €560 if they have two.

If the Government agrees to the policy, parents will receive a huge boost, with a family with three children eligible to receive €840.

A family with twins would also get €840 as they receive one-and-a-half times the normal rate per child.

The plans under consideration by Finance Minister Paschal Donohoe, Public Expenditure Minister Michael McGrath and Social Protection Minister Heather Humphreys could see the payment made before Christmas.

Child care

Parents across the country have been struggling with rising energy, grocery and childcare bills over the past year and will be hoping the Budget will provide them with some relief.

Children's Minister Roderic O'Gorman said on Thursday that 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 ."

Minister O'Gorman said the Government was focusing on improving affordability for parents and said the Green Party wants a "significant increase" in the National Childcare Scheme, which reduces childcare costs.

He said: "There is broad support across the coalition and abroad recognition that the cost of childcare is that is a major burden on families right now. And it's something that we need to work to alleviate."

A new wage deal for childcare workers that would see the minimum pay of €13 per hour will also be signed off in the coming weeks as part of an Employment Regulation Order.

The change will bring in an entry rate level rate per hour.

Housing

The Government is also working on a package of supports for tenants and landlords, which could see several tax breaks introduced.

One measure being considered is the reintroduction of a tax credit for renters, which was removed in 2017 and could save renters up to €1,440 annually.

Another consideration is allowing the local property tax to be deducted from rental income as an expense or allowing landlords to offset rental losses against other taxable income in the current year.

Alcohol and cigarettes

In a major change to trends, taxes on alcohol and cigarettes look as though they will not see an increase in this year's Budget.

This will be the first time the goods have not increased in price over the past seven years, with the cost of a pack of 20 cigarettes usually increasing by 50c each year.

However, if a public-health rationale is put forward, an increase on cigarettes may be considered, although an increase in alcohol prices is said to be unlikely.

Meanwhile, the Vintners' Federation of Ireland has called on the Government to reduce alcohol duties by 15 per cent.

The group said over 1,800 pubs shut their doors between 2005 and the end of 2021 and claimed that a tax cut could help prevent further closures.

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