Budget 2018 - what it means for you

In a nutshell... 
2.5% USC rate cut to 2%
€750 increase in the threshold before hitting the 4.75% USC rate
5% USC rate down to 4.75%
Cut off up €750 from €33,800 to €34,550
Cutoff from married couples up €750 to €43,550
Earned Income Credit up €200 to €1,150
Home carers relief up €100 to €1,200
More details here...

Here's the Budget 2018 Tax Calculator to assess your gains (or losses) 

http://taxcalc.ie/budget-2018/

REACTION SO FAR

The ASTI says there is little positive news in Budget 2018 for Ireland’s 350,000 plus second-level students, many of whom experience unacceptably large class sizes. General Secretary, Kieran Christie, said: “Given the sustained economic growth over the past few years, it is unacceptable that the pupil-teacher ratio at second level remains higher than it was this time 10 years ago."  While he welcomed the additional guidance counsellor posts, he said  these" merely represent another step towards the restoration of schools’ 2011 guidance counselling provision, which was cut in 2012".  Meanwhile, ASTI President Ger Curtin said second-level schools will be surprised that Budget 2018 does nothing to address the shortfall in funding for day-to-day running costs.

Ireland’s largest housing association, Cluid, has welcomed increased spending in Budget 2018. Clúid Housing’s Head of Policy, Simon Brooke said: “We are delighted to see the Government commit to increasing social housing delivery in both 2018 and subsequent years through allocating more funding to the sector.”

The Environmental Pillar has expressed extreme disappointment at the exclusion of any measures to equalise the cost of diesel and petrol in Ireland in Budget 2018. "Diesel fuel exhaust is one of the leading emitters of automotive greenhouse gases and particulates, with the World Health Organization clear that diesel exhaust fumes can cause cancer and emit ten times more health-damaging pollutants than petrol cars," they said.

Irish Rural Link – the national network representing the interest of rural communities said the increased funding to the Department of Rural and Community Development of €19m is disappointing asl it is not sufficient given how far behind rural development is. "It will not be enough to achieve the economic development that is needed in rural areas and are concerned about the implementation of the Action Plan for Rural Development. Rural areas will continue to feel left behind."

The Vintners Federation of Ireland would like to have seen either a reduction in the very onerous excise levels on alcohol in Ireland or an indication that same would happen in the medium term with a view to bringing those levels back towards the European average. "Ireland has the second highest level of excise in Europe and this needs to be addressed to sustain competitiveness particularly in the light of Brexit,” said Padraig Cribben, Chief Executive, VFI.

ALONE, the charity that supports older people to age at home, has welcomed the increase to the state pension, announced as part of Budget 2018, but stated that the government needs to do more to support Ireland’s aging demographic. Sean Moynihan, CEO of ALONE, commented, “While we welcome the €5 increase to the pension, we have been campaigning for an indexing of the pension to ensure that its value is safeguarded for older people. This would end the yearly calls for pension increases and give older people fair financial independence.” 

The Union of Students in Ireland (USI) is raising concerns over the lack of investment in improving access to education through increasing SUSI grant thresholds, or improving on-campus mental health services, declaring Budget 2018 as ‘leaving students behind’. However, the union welcomed meaningful investment of €310 million available to 2021 to address the infrastructure needs of higher education sector.  

The introduction of a sugar sweetened drinks levy is probably the single most important action Government can take to tackle Ireland’s obesity crisis according to Irish Heart head of advocacy, Chris Macey. "As a result, this is a landmark day in the fight against what is now recognised as perhaps the biggest threat to the health of the nation. “The Minister’s announcement demonstrates a significant commitment on the part of Government to meet its duty of care to protect the health of children in particular. We are also encouraged by indications that the measure is already proving effective by prompting beverage companies to reduce sugar content to ensure products fall below the threshold for the tax," he said.

THE DETAILS

Pascal Donohoe has delivered his first budget as Finance Minister which involves a total Government spend of €60.9 billion.

The main points include a €5 increase across the board for social welfare recipients,tax bands widened, Mortgage Interest Relief to be abolished from 2020, 3,800 new social homes, 50c on packet of cigarettes and 30c sugar tax on soft drinks.

The corporation tax rate will remain 12.5%.

The point at which an income earner attracts the higher rate of income tax will rise next year by €750 per annum.The entry point for single earners increases from €33,800 to €34,550.

The entry point to USC stays at €13,000. The 2.5% rate falls to 2%, with the ceiling for the new rate increasing from €18,772 to €19,372.

WATCH: Budget proceeedings Live here

The 5% rate of USC falls to 4.75%, reducing the top marginal rate of tax on income up to €70,044 to 48.75%.

There will be a €200 increase in the Earned Income Credit, bringing it to €1,150 per year from 2018.

A €5 per week increase in all weekly social welfare payments, including disability allowance, carer's allowance and both Jobseekers' Allowance and Benefit, State pension also up €5. These measures will take effect in the last week of March. A Christmas Bonus payment of 85% will again be paid to all social welfare recipients in 2017.

Minimum wage to increase to €9.55 from January.

Additional €20m allocation in 2018 to support a range of childcare measures including, from September 2018, further development of the extended free Pre-School programme, ensuring entitlement to a full two-year service

Department of Rural and Community Development funding to increase by €19m on existing programmes.

Funding increase of €64m in Department of Agriculture, Food and Marine bringing total investment to 1.5bl in 2018. 25m for the development of further Brexit response loan schemes for the agrifood sector.

There will be an increase of €2.5 million in the allocation for the Irish language and the Gaeltacht in 2018

A Brexit loan scheme of up to €300m will be made available at a competitive rate to SMEs, including food businesses, given their unique exposure to the UK market, to help them with their short-term working capital needs.

800 gardaí and 500 civilians are to be hired next year for An Garda Síochána.

Almost 1,300 additional teaching posts will be created in schools in 2018 with  Pupil Teacher Ratios at primary level reduced.

A tax at a rate of 30c per litre on drinks with over 8g of sugar per 100ml and a reduced rate of 20c per litre on drinks with between 5 and 8g of sugar per 100ml. 

Excise duty on a pack of 20 cigarettes will rise by 50c, with a pro-rata increase on other tobacco products. This will bring the price of cigarettes in the most popular price category to €12.

The Department of Health will receive an additional €685m in its allocation, bringing total funding to almost €15.3bn for 2018. 

Mortgage interest relief is to end after 2020, tapering to 75% next year, 50% in 2019, and 25% in 2020.

The Government is to more than double the current 3% vacant site levy rate that applies in the first year to 7% in the second and subsequent years.      

There will be an increasing the level of stamp duty on commercial property transactions from 2% to 6% with effect from midnight tonight.

Paschal Donohoe says housing remains a priority for the Government. Funding for homeless services will increase by €18million to over €116million.

€1.83bn is also being made for additional housing delivery in 2018 including the provision of 3,800 new social homes.

Among the measures, he announces are plans to make up to €750 million of the Ireland Strategic Investment Fund available for commercial investment in housing finance.The funds will be made available to a new vehicle to be known as Home Building Finance Ireland (HBFI).

The Government will establish the Rainy Day Fund in the coming year and transfer at least €1.5 billion to it from the Ireland Strategic Investment Fund to start it off.