Budget 2019 one week on - what does it mean for you?
There was a little something for everyone.
Budget 2019 was announced last Tuesday with a range of measures, touching on tax, housing, health and childcare. Now that the dust has settled, here are the main takeaways…
Changes to the USC and an increase in the entry point for the higher rate of income tax
There are a couple of changes to the Universal Social Charge (USC) - the second band is being increased from €19,372 to €19,874, and the third rate is being reduced from 4.75% to 4.5%.
Meanwhile, the entry point to the higher rate of income tax for all earners is being increased by €750 and the weekly threshold for the higher rate of employer’s PRSI will be increased from €376 to €386.
On top of this, the hourly minimum wage is going up to €9.80 from January and, for self-employed workers, the Earned Income Credit will go up a further €200 to €1,350.
What do the tax changes mean in real terms?
For a 25-year-old single person with a salary of €28,000, these changes will make a difference of €34 over the entire year - or just under €3 per month.
Meanwhile, a married 33-year-old who has a gross salary of €36,000, and whose spouse doesn’t work, will be just €54 better off per year as a result of these changes.
However, a 46-year-old married couple, with salaries of €35,000 and €50,000, will end up €441 better off in 2019, largely down to paying less income tax at the higher rate, and a reduction in the USC.
Social welfare payments
There’s going to be an increase of €5 per week to all social welfare payments from March 2019, and the Christmas bonus payment - which is an extra payment for people who are getting a long-term social welfare payment - will be fully restored this year. This is usually paid in late November or early December.
From November next year, a new ‘paid parental leave’ scheme will be introduced, which will provide every parent with two extra weeks’ paid leave in their child’s first year - Minister for Finance Paschal Donoghue said this will be increased to seven weeks over time.
In other good news for parents, there’s also a €25 increase in Back to School Clothing and Footwear Allowances.
Changes in health and the “old reliables”
There’s an increase of €1.05 billion in health funding for 2019, which brings the total health budget to €17bn - but what measures are going to impact people on the ground?
Well, there’s a €25 increase in the weekly income threshold for GP visit cards, as well as a €0.50 reduction in prescription charges from €2.00 to €1.50 for all medical card holders over the age of 70. And there’s also a €10 reduction in the monthly Drugs Payment Scheme threshold - taking it from €134 to €124.
Meanwhile, there’s been €84 million allocated to Mental Health Services, as well as an extra €150 million for disability services (bringing the total funding to €2bn), but it remains to be seen what the impact of this funding will be.
And - as is becoming tradition - excise duty on a packet of 20 cigarettes is being increased by 50 cents again, bringing the cost of a packet of cigarettes to €12.70.
What’s going on with climate change measures?
There was much talk before the budget about carbon tax - which all gas customers in Ireland pay, and which impacts the price of petrol, diesel etc., too. However, this was actually left untouched in the budget, which is good news in the middle of energy price hikes, but has annoyed environmental campaigners.
There were some other climate-related measures, however, including:
- €103.5 million for improvements in grant and premium rates for planting forests.
- Additional funding of €70 million for the Environment and Waste Management Programme.
- An extension of VRT relief for hybrid vehicles until end of 2019.
Not getting much from Budget 2019? Switch and save hundreds on household essentials
This year’s budget wasn’t exactly controversial, with some saying that there was a little for everyone but not a lot for any one group.
If the budget isn’t going to make a huge difference to your pocket, never fear - there are still loads of ways to save on household essentials and hang on to a bit more of your hard-earned cash, for example:
- You could switch broadband provider. At the moment, there are savings of well over €400 available on some broadband packages - so if you haven’t switched in a while it’s worth taking a look at what’s out there and seeing if there’s a new package that could work for you.
- Think about cancelling elements of your household services that you don’t use. For example, if you pay for a digital TV package, but you spend all of your time streaming content, you could consider cancelling your TV subscription - this could save you a packet.
- Change to a new energy deal. If you haven’t switched energy provider in the last 12 months, the fact is that you are paying well over the odds for your gas and/or electricity. With all of the price hikes we’ve seen, you might feel there’s no point switching, but the average customer can actually save up to €359 by switching from standard tariffs to the cheapest deals in the market, so it’s well worth taking a few minutes to compare deals and make the switch.
- Try a SIM-only plan. If you’re out of contract with your mobile provider, and you’re still happy with your handset, you’ll definitely save by moving to a SIM-only plan. These plans are available starting from just €10, so if you currently pay €50 per month for your plan, you could save hundreds over the course of a year.
Switch and save up to €359 on your energy bills
It only takes a few minutes to find a cheaper deal and start saving