Budget 2027: tax cuts, reductions to childcare, and increases to social welfare expected

Tánaiste Simon Harris and Minister for Public Expenditure Jack Chambers are due to unveil Budget 2027 from 1pm today, with several packages expected to assist with the rising cost of living.

Among the measures expected are potential weekly increases to the state pension and social welfare payments, reductions in childcare costs, and a range of tax cuts and changes.

Mr Harris is expected to take to the podium from 1pm, followed by Mr Chambers, both announcing the overall package worth €8.65bn over a 90-minute period.

Tax cuts 

A range of tax cuts are expected to be announced later today, with changes to income tax taking pride of place.

These are set to involve a move in tax bands, credits, and the universal social charge (USC).

It is largely expected that the entry rate for the higher 40% tax bracket will increase from €44,000 to €46,000, seeing savings of up to €400 per year, or €33 a month, for those impacted.

In terms of the State Pension and other Social Welfare payments, it is understood that the Government has settled on an increase of €10 per week, with double payments confirmed over the Christmas period.

A €500 cost-of-disability lump sum payment is also expected to be announced.

Cost of living 

A package of measures to help people with the cost of living is also expected, with increases planned under the fuel allowance, and the Help to Buy Scheme.

As concerns for the rising cost of fuel continue to grow, the Government is expected to announce a weekly €5 increase to the fuel allowance.

Additionally, the planned carbon tax increases on kerosene and home-heating oil will be halted for the remainder of this Government's term.

The amount available for first-time buyers under the Help to Buy Scheme is further expected to increase in an effort to ease growing concern for the cost of housing.

Speaking on Monday, Taoiseach Micheál Martin said he has a “favourable disposition” towards scrapping stamp duty for first-time buyers, while Mr Harris said the coalition is “ad idem” about helping people to get on the property ladder.

Education and childcare costs 

Families and students are further expected to benefit from Budget 2027, with a substantial expansion of the National Childcare Scheme planned, targeted at particularly young children.

Under this expansion, families with a child in full-time creche could save up to €1,000 per year.

It is understood this saving will be only extended to children in Junior and Senior Infants who need after-school care.

For students, the Budget is also expected to include a cut in the Student Contribution Fee – which is currently capped at €2,500.