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Ireland’s Budget 2014: what you need to know

Minister for Finance Michael Noonan TD, right, and Minister for Public Expenditure and Reform Brendan Howlin TD at Government Buildings in Dublin this afternoon at a press call ahead of the announcement of the Budget 2014
Minister for Finance Michael Noonan TD, right, and Minister for Public Expenditure and Reform Brendan Howlin TD at Government Buildings in Dublin this afternoon at a press call ahead of the announcement of the Budget 2014

IRELAND’S Finance Minister Michael Noonan and Minister for Public Expenditure Brendan Howlin have delivered the country’s seventh austerity Budget in the Dáil.

Among the controversial measures in Budget 2014 are a lowering of the jobseeker’s allowance to €100 per week to all under-25s and a scrapping of telephone allowances for pensioners.

Elsewhere, beer, spirits and cigarettes are all to go up by 10 cents, while wine is to go up by 50 cents, following on from last year’s €1 VAT hike on a bottle.

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The main details of Michael Noonan’s speech:

 

Air Travel Tax

Reduced to zero per cent with an aim to encourage airlines to build new routes and traffic.

Income Tax, VAT, USC

No increases in any of the three tax categories.

VAT

Surprise here as reduced rate of 9 per cent for tourism sector to be retained.

All other VAT rates are to remain untouched.

Magdalene Survivors

Any lump sums paid to survivors as part of a compensation scheme will be tax exempt.

Pensions

The pension levy of 0.6 per cent will be abolished on 31 December 2014.

An additional levy on pension funds at 0.15 per cent will be introduced.

DIRT

A new higher single unified rate of 41 per cent for DIRT and the exit tax that applies to life assurance policies and investment funds has been introduced.

Business

Those unemployed, and starting their own new business, can avail of the ‘Start Your Own Business’ Scheme, which will allow them to be  exempt from income tax for two years.

Home Improvement Incentive Scheme

This will be calculated at 13.5 per cent on works worth over €5,000 and under €30,000 on family’s primary residences in 2014 and 2015.

Corporation Tax

No change as the Minister said Ireland is 100 per cent committed to its 12.5 per cent Corporation Tax rate.

The Finance Bill will be changed to secure Ireland’s reputation as being “part of the solution” to the global tax crisis and not “part of the problem”. The change will ensure Irish registered companies cannot be “stateless” in terms of their place of tax residency.

Motoring

There will be no increase in excise duty on petrol or diesel.

There will be no increase in motor tax.

Cigarettes and Alcohol Excise

Beer, cider and spirits will all rise in price by 10 cent.

From midnight, cigarette packets will be taxed 10 cent more.

Bottles of wine will be taxed an extra 50 cent more.

Medical Insurance

Tax relief for medical insurance will be capped at €1,000 for adults and €500 for children.

Banks Levy

Irish banks will be expected to make an annual contribution of €150 million to the Exchequer annually.

Farming

The farmers’ flat rate addition is being increased from 4.8 per cent to 5 per cent from January.

The Capital Gains Tax retirement relief has been extended to disposals of long-term leased farmland in certain circumstances so older farmers will lease out their land to younger men and women.

Property

Any property bought next year will be exempt from Capital Gains Tax.

Single Parents

The tax relief credits will be changed from the One Parent Tax Credit to a Single Person Child Carer Tax Credit. Only the primary carer, rather than both single parents, will be able to claim the credit which is of equal value to what it is replacing.

 

The media take photographs of the Minister for Public Expenditure and Reform Brendan Howlin TD and Minister for Finance Michael Noonan TD holding up Documents of the Budget on the steps of Government Buildings in Dublin
The media take photographs of the Minister for Public Expenditure and Reform Brendan Howlin TD and Minister for Finance Michael Noonan TD holding up Documents of the Budget on the steps of Government Buildings in Dublin

 

 

Here are the main details from Brendan Howlin’s statement:

 

GP Care

Free GP care for all those aged under five years old will be introduced. The cost to the State will be €37 million

Medical Cards

Income thresholds for medical cards for those  over 70 reduced to €900 for a couple and €500 for a single person.

Maternity

Maternity benefit standarised to €230 per week for new claimants from January. It is currently between €217 – €262.

Prescription Charge

Per-item prescription charges are to increase to €2.50 per item – this charge began as a 50 cent levy in 2010. The monthly cap is €25 per family.

Social Welfare

The total adjustment is €290m.

€100 reduced rate of Jobseeker’s Allowance and Supplementary Welfare Allowance to existing recipients who reach 22, and for new entrants aged up to 24 on or after 1 January 2014, has been extended.

Another reduced rate of €144 for jobseekers will apply to those reaching 25 from January next year.

The number of waiting days for entitlement to Illness Benefit increased from 3 days to 6 days to save €22 million.

Child Benefit remains unchanged at €130 per month.

The telephone allowance will be discontinued to save €44 million.

Public Service

Some hiring in schools, hospitals and An Garda Síochána but the wage bill will still be cut by €500 million.

Plans to hire 1,250 new classroom and resource teachers for the school system.

€5 million allocated to extend primary schools’ books to rent programme.

National Lottery

€200 million raised from the sale of the National Lottery will be used for:

  • the National City of Culture Initiative;
  • the Better Energy Programme;
  • a new round of Sports Capital Grants;
  • the building of a new National Indoor Training Arena at the National Sports Campus;
  • a number of 1916 Commemoration Projects;
  • housing adaptation grants for older people and people with a disability;
  • road maintenance and repair works;
  • the development of a large scale multi-functional events centre in Cork;
  • the Wild Atlantic Way Driving Route tourism project.

Housing

€10 million provided for an unfinished housing estate resolution initiative.

Bereavement Grant

The €850 once-off payment to bereaved families will be abolished to save €17 million.

Invalidity Pensions

The €230.30 weekly rate will be discontinued for those age 65 and alighted to the €193.50 currently paid to those under 65.

TV License

Annual payment to RTÉ for TV Licence will be reduced by €5 million.

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One comment on “Ireland’s Budget 2014: what you need to know”

  1. Paddy

    Childrens Allowance was changed!

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