Thousands of people across Ireland are set to benefit from a number of Budget changes coming into effect in 2023.
There will also be proportional increases for those on reduced rates of payment, and qualified adults.
The Department of Social Protection budget allocation is €23.4 billion in 2023.
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Some of the changes announced in the Budget for social welfare recipients, workers, carers and more, come into effect from the beginning of January 2023 or later in 2023.
Social Welfare payments
For example, those under 25 that are receiving a decreased payment of Jobseeker's Allowance will receive the full €12 increase in January 2023.
The weekly rate for a qualified child will increase by €2 from €40 to €42 for children under 12 years of age. It will increase by €2 from €48 to €50 for children aged 12 years and over (January 2023).
Fuel Allowance
The Fuel Allowance threshold is also set to increase from €120 to €200 above the applicable State Pension (Contributory) rate for people under 70.
Anyone aged 70 and over can qualify for Fuel Allowance as long as their weekly means (including State Pension) is not above €500 per week for a single person and €1,000 per week for a couple.
Disablement Benefit and half-rate Carer’s Allowance will be disregarded in the means test for Fuel Allowance (January 2023).
Payments to families
The Working Family Payment income limits will increase by €40 across all family sizes (January 2023).
Disability and Illness benefits
People getting Disability Allowance and Blind Pension will be able to earn up to €165 from work without affecting their payment.
This is an increase of €25 on the previous threshold of €140 (January 2023).
Carers
Domiciliary Care Allowance (DCA) will increase by €20.50 from €309.50 to €330 in January.
DCA will be available for babies who remain in an acute hospital after birth for a period of 6 months (January 2023).
Employment programmes
People on The Community Employment (CE), Tús and Rural Social Scheme top up payment will get an increase of €5 from €22.50 to €27.50.
Workers
The weekly income threshold for the higher rate of employer’s PRSI will increase from €410 to €441 to ensure that there is no incentive to reduce the working hours for a full-time employee on the increased minimum wage.
Farming Assist
The income received from agri-environmental schemes disregarded in the means test for Farm Assist will increase from €2,540 to €5,000.
Pilot food poverty programme
A pilot scheme will be developed and implemented to support people experiencing food poverty.
Help with energy costs
All domestic electricity customers are to get a €600 credit to help reduce electricity bills.
The credit will be paid in 3 instalments of €200. The first payment was made in November 2022.
The second electricity credit will be made in January 2023.
The third will be made in March 2023.
The 9% VAT rate for gas and electricity is extended to 28 February 2023.
The reduction of 21 cent per litre tax for petrol, 16 cent per litre for diesel and 5.4 cent per litre for Marked Gas Oil are also extended to 28 February 2023.
Tax
Income tax rates will stay the same (at 20% and 40%), but there will be increases to tax credits and changes to the income tax bands in 2023.
The standard rate income tax band (the amount you can earn before you start to pay the higher rate of tax) will be increased by €3,200.
The following tax credits will increase by €75 to €1,775:
- Personal Tax Credit
- Employee Tax Credit
- Earned Income Tax Credit
The Home Carer Tax Credit will increase by €100 to €1,700.
Universal Social Charge (USC)
The ceiling of the 2% USC band will increase by €1,625 to €22,920, so that the salary of a full-time worker on the minimum wage will remain outside the higher rates of USC.
Rent Tax Credit
If you are paying for private rented accommodation, you can claim a new Rent Tax Credit of €500 a year for 2022 and subsequent years.
This tax credit applies to each tenant rather than each tenancy.
For rent you pay in 2022, you will be able to claim this credit early in 2023.
Vacant Homes Tax
A Vacant Homes Tax will be introduced in 2023.
It will apply to residential properties that are occupied for less than 30 days a year.
The tax charged will be three times the amount of the Local Property Tax rate for the property.
VAT (Value Added Tax)
The VAT rate for newspapers (including digital editions) will be reduced from 9% to zero.
VAT will also be reduced to zero for:
- Defibrillators
- Period products
- Hormone replacement therapy (HRT) and nicotine replacement therapy medicines that are not currently zero-rated (such as patches and gels)
These VAT changes will apply from 1 January 2023.
The reduced VAT rate of 9% for the hospitality and tourism sector will continue until 28 February 2023.
Employees
Income tax rates will stay the same (at 20% and 40%), but there will be increases to tax credits and changes to the income tax bands for 2023.
The standard rate tax band (the amount you can earn before you start to pay the higher rate of tax) will be increased by €3,200 to €40,000 for a single person and to €49,000 for married couples with one earner.
The following tax credits will increase by €75 to €1,775:
- Personal Tax Credit
- Employee Tax Credit
- Earned Income Tax Credit
The ceiling for the 2% Universal Social Charge (USC) band will increase from €21,295 to €22,920 in line with the 80 cent per hour increase in the national minimum wage from 1 January 2023. This ensures that full-time employees on the minimum wage will remain outside the higher rates of USC.
The weekly income threshold for the higher rate of employer’s PRSI will increase from €410 to €441 to ensure that there is no incentive to reduce the working hours for a full-time employee on the increased minimum wage from 1 January 2023.
Measures to be introduced in 2023/24 academic year:
- The income threshold for the 50% student contribution grant will increase from €55,240 to €62,000 per year (from 1 September 2023)
- The student contribution will be reduced by €500 for families earning between €62,000 and €100,000 (from 1 September 2023).
- The Postgraduate SUSI fee grant will increase by €500.
Childcare
The Department of Children, Equality, Disability, Integration and Youth budget allocation is €2.4 billion.
The National Childcare Scheme subsidy will be increased from €0.50 per hour to €1.40 per hour from January 2023. This means up to an additional €40.50 reduction in weekly childcare fees for parents.
Supports for homeless people
Funding of €215 million has been allocated to homeless services in 2023.
This will support local authorities providing emergency accommodation and other services and help people to exit homelessness.
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