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Here are the new measures that have already kicked in or been extended, and what to expect.
THE MORNING LEAD
Budget 2024: Some changes kicked in at midnight - others won't take effect for quite a while
Here’s what you need to know.
BUDGET DAY IS done and dusted for another year.
The changes announced yesterday included tweaks to the USC and tax bands, tax reliefs for landlords, social welfare hikes and an increase in the minimum wage.
Here are the new measures that have already kicked in or been extended – and what to expect in the months to come.
Cigarettes
The price of cigarettes has already increased by 75 cents – that’s 25 cent higher than the increase many have become accustomed to over the last seven budgets.
The average price of a packet of cigarettes is now €16.75. There will also be a pro-rata increase on other tobacco products.
Minister Michael McGrath said the increase was aimed at further “reducing smoking levels in our society” and in line with public health measures.
Additionally, vaping products will receive a domestic tax, not in this budget, but in the next one. Government sources had indicated the tax would not be rolled out immediately as new legislation would be needed.
Currently, VAT is charged on vaping products but they do not have excise duty levied on them like normal cigarettes.
Housing and Rent reliefs
As of today, prospective homeowners can avail of both the Local Authority Affordable Purchase Scheme and the Help-to-Buy scheme in the same application, after amendments were made last night. Previously, an application to only one of the two schemes was allowed.
The help-to-buy (HTB) scheme has been extended to 31 December 2025.
The Local Authority Affordable Purchase Scheme provides a de-facto loan to buyers, by purchasing a 20% stake in the property and offsetting the cost to the homeowner – who must pay it back after 40 years.
The HTB Scheme gives a refund of the income tax and Deposit Interest Retention Tax (DIRT) you have paid in Ireland for the four years before the year you apply.
The amendment will mean buyers will be able to avail of a 20% discount on the price of the property as well as the the tax refund.
Energy and fuel
The 9% VAT rate on gas and electricity has been extended for another 12 months.
This is the second extension of the scheme, which was brought in as a cost-0f-living measure in April 2022. It was due to return to its previous rate, of 13.5%, at the end of this month.
Minister for Finance Michael McGrath said: “It is estimated that consumers will save an additional €90 for electricity and those who use gas will save an additional €62 during the 12-month extension.”
Similarly, The Journal reported last month on concerns regarding the planned excise duty increase on petrol and diesel, that was due to take place on 31 October.
Yesterday, McGrath said he was “conscious that the price of petrol and diesel for motorists have increased in recent weeks, driven by volatility in international oil prices”.
The finance minister confirmed that these increases will not take place this month, however, will be split into “two equal installments” on 1 April and 2 August 2024.
However, the cost of petrol and diesel has still risen this morning following new duties under the Carbon Tax.
The tax increased the cost of both fuels rise from €48.50 per tonne to €56 per tonne, which works out to 2.5 cents more on the cost of diesel and 2.1 cents more on the cost of petrol.
What to expect later in the year
A number of one-off bonuses, social-welfare payments, and tax increases were announced which will be enacted later in the year.
The first of which, is an increase to the Vacant Homes Tax to “five times the property’s existing basic Local Property Tax rate” next month.
In social welfare, a €2.3 billion support package was announced by Minister for Public Expenditure and Reform Paschal Donohoe which included a number energy, fuel and increased welfare payments.
Three credits worth €150 each to assist with energy bills will be provided, the first of which will be given to billpayers at the end of this year, with another to follow in April 2024.
A lump sum payment of €300 will be made to those on the Fuel Allowance in the last quarter of this year. Those in receipt of the Living Alone Allowance will receive an additional €200 this year.
Regular Social Protection recipients will receive the Christmas Bonus in early December, followed by a once-off double payment for those in receipt of any social welfare payments in January.
Donohoe announced a “special” once-off payment of €400 will be made before Christmas to those who receive the Carer’s Support Grant, Disability Allowance, Blind Pension, Invalidity Pension and Domiciliary Care Allowance.
A €12 weekly increase to all social welfare payments, across-the-board, will come in place next year. However, disability groups have heavily criticised this as the current allowance rate will still be below the poverty threshold.
Inclusion Ireland CEO Derval McDonagh labelled the payment as “tokenism” and said that it was a “disturbing blow to human rights”. She added this year’s budget had “abandoned disabled people living well below the poverty line”.
A double payment of Child Payment – worth an additional €140 for each child – will be made to all qualifying households before Christmas. A double payment of the Foster Care allowance will also be made this year.
A €400 lump sum payment will be made to recipients of the Working Family Payment later this year, the public expenditure minister announced.
Further into next year, the National Childcare Scheme subsidy is increasing from €1.40 per hour to €2.14 per hour from next September.
The CEO of Early Childcare Ireland Teresa Heaney that parents will be “disappointed” not to see further decreases in the cost of childcare until late next year.
Finally, as part of a suite of measures that also include an increase in the rent tax credit to €750, parents of students can claim €500 tax relief credits on the rent paid for rent-a-room or ‘digs’ style accommodation from the years 2022 and 2023.
The Revenue Commission told The Journal that parents can claim these credits at the start of next year, after the relevant systems have been developed.
