Budget 2023 will be announced in just a few short weeks as the Government plan to take on the cost of living crisis.
As food shopping, fuel prices and energy costs all continue to rise, many will be eager to see what the Budget has in store. Proposed payments include changes to child benefit, social welfare increases, and an energy rebate.
One big proposal on changes to the tax band looks to have been scrapped and there are still discussions on alcohol and cigarettes.
Read more: Special needs assistants could strike over cost of living crisis
Here is a look at what we know so far.
Energy payment
As energy bills continue to sky-rocket, the Government are looking to introduce supports to help Irish households. Electricity costs have jumped by more than 86 per cent in 12 months, according to CSO figures.
Budget 2023 could introduce a rebate on energy costs of up to €500. Similar to the €200 credit issues to households last April, this new payment would be paid between November and March.
The scheme in April applied to all domestic electricity accounts registered with an electricity company in the Republic of Ireland, and this could also be the case for the new rebate. So every Irish household could have an extra €500 to pay their energy bills this year.
Social welfare change
It looks like a hike of at least €10 in pension and social welfare payments will be introduced. Finance Minister Paschal Donohoe published the Tax Strategy Group papers earlier this year, where all welfare packages outlined included an increase ranging between €10 and €15.
The first of which recommends a €15 increase across all payments. This would cost the State around €1.1 billion.
If this were to go ahead, the majority of people receiving social welfare payments would receive €223 per week, while a person on the State pension would see their pay packet increase to €268 per week.
Another option under consideration is a €10 increase in all welfare payments along with a €10 hike in the Fuel Allowance and Living Alone allowance.
Read more: Cheapest time to use electricity and what appliances drain your cash according to expert
Child Benefit
The Government are considering helping parents with Christmas costs in Budget 2023. A once-off double payment of the monthly €140 child benefit could come into effect this December.
Those in receipt of a child benefit payments could be in line for a €280 one-off payment if they have one child or €560 if they have two. A family with three children would receive €840 - a huge boost for parents who are currently struggling. A family with twins would also get €840 as they receive one-and-a-half times the normal rate per child.
Other benefits
In a huge change to trends, taxes on booze and cigarettes may be spared from increases this year. The cost of a pack of 20 cigarettes usually increases by 50c each year, however this may not go ahead in the 2023 budget.
However, if a public-health rationale is put forward, an increase on cigarettes may be considered, although an increase in alcohol prices is said to be unlikely.
Another consideration is allowing the local property tax to be deducted from rental income as an expense or allowing landlords to offset rental losses against other taxable income in the current year.
Is new tax band going ahead?
Leo Varadkar had proposed introducing a new tax band for those earning between €36,800 to €46,800. The 30 per cent tax rate proposal would have cost the state €945 million a year. Individuals and married one-earner couples would take home an extra €1,000 a year under this band.
However, this tax band proposal has been scrapped. The Tánaiste’s tax change proposal was met with lukewarm enthusiasm from some Cabinet colleagues, including finance minister and fellow Fine Gael minister, Paschal Donohoe, who said it would be “difficult” to implement at short notice. It’s understood that Fianna Fáil ministers were not too happy with the tax code change that would benefit the wealthier in society more than the poorer.
Read next:
