Budget 2021: How will the budget affect you? 

Budget 2021: How will the budget affect you? 

The Minister for Public Expenditure and Reform, Michael McGrath and Minister for Finance Paschal Donohoe pictured at Government Buildings, Dublin for Budget 2021. JULIEN BEHAL PHOTOGRAPHY.

Updated 4pm

What has been announced today and how will it affect you?

Here are the some of the main points 

Tax 

There are no broad changes for income tax bands for employees.

The earned income credit will increase.

The ceiling of the second USC rate band will be increased from €20,484 to €20,687 

The weekly threshold for the higher rate of employers PRSI will go from €394 to €398.

People working from home will be able to claim tax deductions on utilities such as light, heating and possibly broadband.

Motoring 

The price of a tank of petrol and diesel will increase from midnight tonight.

The Carbon tax will be increased by €7.50 from €26 to €33.50 per tonne/CO2.

It means the price of a tank of diesel €1.50 will increase by around while the price of a tank of petrol will increase by around €1.30 

A new motor tax rates table is to be introduced. 

Cigarettes and alcohol 

The price of a packet of cigarettes is to increase by 50 cent from midnight, putting the price of a pack up to around €14.

No changes were announced regarding taxation on alcohol.

Welfare

The planned increase in the pension age in January will not proceed. The age for eligibility will remain at 66 years.

Parent’s benefit to be increased by three weeks 

€3.50 increase in the rate of the Fuel Allowance 

€150 increase in the Carer’s Support Grant 

€5 increase in the Living Alone Allowance 

The vast majority of people currently receiving the pandemic unemployment payment will receive the Christmas bonus if they remain out of work at the start of December.

The Qualified Child Payment is to be increased by €5 for over 12s and €2 for under 12s.

Housing 

Help to Buy Scheme extended to the end of 2021 

A reduced stamp duty rate of 1 per cent on transfers of agricultural land between family members will be extended for a further three years.

Health 

€4 billion is to be invested in the health service. 

Provision will be made for 1,146 new beds while the number of adult critical care beds will increase to 321 by the end of next year.

1,250 community beds will be added.

More to follow 

A member of the public watching Minister for Finance Paschal Donohoe on a television as the Minister delivers Budget 2021 to the Dail. Photograph: Sasko Lazarov / RollingNews.ie
A member of the public watching Minister for Finance Paschal Donohoe on a television as the Minister delivers Budget 2021 to the Dail. Photograph: Sasko Lazarov / RollingNews.ie

Earlier 

The Minister for Public Expenditure and Reform, Michael McGrath has announced €500 million in additional expenditure measures to support businesses and communities.

A record €4 billion is to be invested in the health service "to ensure it can cope with Covid-19 and also to make permanent improvements that will be here long after the virus is gone"

Provision will be made for 1,146 new beds while the number of adult critical care beds will increase to 321 by the end of next year. 1,250 community beds will be added.

€100 million is being provided for new disability measures next year, which the Minister said will provide supports for approximately 1,700 school leavers, deliver the resumption of day services, promote disability integration and deliver respite services, de-congregation and increase personal assistant hours.

The Minister said that in direct response to Covid-19, €500 million was provided as part of the July Stimulus to accelerate capital works and to generate jobs and economic activity across all regions of the country.

“Together with the additional €600 million I am providing for core capital investment in 2021, the State will, for the first time in our history, deliver over €10 billion in Exchequer resources for critical projects across all regions of our country,” he said.

These projects include construction on a range of major road projects including the N22 and Dunkettle Interchange in Cork.

Over €270m is being made available to support up to 20 higher education building projects €10 million is being made to address challenges at Cork and Shanon airports.

The Minister announced that €500 million will be allocated for the construction of 9,500 social houses €29 million in funding is being made available for heritage sites.

€55 million is to be allocated to a tourism business support scheme.

A review of the National Development Plan is to be launched.

€9 billion is to be allocated to the Department of Education with 990 additional SNAs and 403 additional teachers to be hired.

Class sizes in primary schools are to be reduced to 25 pupils.

Funding has also been allocated to fund teacher education.

The Minister announced a number of enterprise supports including An Employment Wage Support Scheme to run into 2021.

Additional funding of €14 million will be provided for the Gaeltacht and Irish language sector next year.

In the area of social welfare, the Minister announced that the fuel allowance is to be increased, the qualified child payment is to be increased, and the planned increase in the pension age in January will not proceed.

“I am increasing the Living Alone Allowance by €5 to €19. This will help protect thousands of elderly people who are at risk of poverty and people with disabilities. I am increasing the Fuel Allowance by €3.50 per week to €28 to compensate those on lower incomes for the additional energy costs they are likely to incur due to Carbon Tax changes. I am increasing the Qualified Child Payment by a further €5 for over 12s and €2 for under 12s. This protects low income families and will reduce child poverty. In framing this package, government has drawn on research from groups such as the Vincentian partnership to protect those who are most at risk of poverty. In addition to these measures, I am increasing the Carer's Support Grant by €150 to €1,850 per year. I am extending Parent’s Benefit by a further three weeks; and for self-employed recipients of the Pandemic Unemployment Payment, I am introducing an earnings disregard to allow them to take up intermittent work without losing their benefit,” the Minister said.

Budget 2021 - Covid-19 supports 
Budget 2021 - Covid-19 supports 

Previously 

The Finance Minister has announced that the ceiling of the second USC rate band will be increased from €20,484 to €20,687 to support those on minimum wage For those working from home, there will be a tax deduction for utility expenses.

For the self-employed, the Minister said he will fully implement a Programme for Government commitment to equalise the Earned Income Credit with the PAYE credit by raising it by €150 to €1,650.

The Minister also announced an increase in the Dependent Relative Tax Credit from €70 to €245.

The farm consolidation stamp duty relief is to be extended by 2 years to 31 December 2022.

The Help to Buy scheme is being extended to the end of 2021.

The carbon tax will be increased by €7.50 from €26 to €33.50 per tonne/Co2 to auto fuels from tonight and all other fuels from 1 May 2021.

The price of cigarettes is rising by 50 cent to bring the price of cigarettes up to around €14 per pack.

Updated 13.35

The Finance Minister also announced details of a new Covid Restrictions Support Scheme to support business in sectors such as the arts, recreation and entertainment affected by the restrictions.

Those in affected areas will receive payments based on their 2019 average weekly turnover.

The scheme will be affected from now until March 31st next year.

The Minister also announced that the 13.5 per cent VAT rate for the hospitality sector is to be reduced to 9 per cent from November 1st.

In terms of taxation, the Minister said there were no broad changes for income tax bands.


Earlier 

The Government is this afternoon unveiling its first budget. 

Fine Gael Minister for Finance, Paschal Donohoe TD and Cork's Fianna Fail Minister for Public Expenditure and Reform, Michael McGrath TD are announcing details of the Budget from the Convention Centre in Dublin. 

It is the first time the budget has been delivered outside of Leinster House. 

In his opening speech, Fine Gael Minister for Finance, Paschal Donohoe said "we live in an era of great uncertainty and continued risk" and said it wasn't enough that the budget surmounts the immediate threats we face, but that it needs to also advance efforts to make progress on the great priorities which our society continues to value.

Fine Gael Minister for Finance, Paschal Donohoe TD and Fianna Fail Minister for Public Expenditure and Reform, Michael McGrath TD arriving at Government Buildings for the joint press conference for Budget 2021. Sasko Lazarov/RollingNews.
Fine Gael Minister for Finance, Paschal Donohoe TD and Fianna Fail Minister for Public Expenditure and Reform, Michael McGrath TD arriving at Government Buildings for the joint press conference for Budget 2021. Sasko Lazarov/RollingNews.

The Minister said his Department is forecasting a total loss of 320,000 jobs in 2020, with an expected recovery of 155,000 jobs next year. 

A deficit of €21.5 billion or 6.2 per cent is also projected. 

A deficit of 5.7 per cent is forecast for next year. 

The Minister said the country's Rainy Day Fund of 1.5 billion is to be used. 

The overall budget being announced is valued at more €17 billion, which he said is unprecedented in size. 

€8.5 billion is being spent on public services to address the challenges of Covid-19, with €3.8 billion spent on supporting existing services. 

A €3.4 billion recovery fund is also being put in place. 

More to follow. 

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