What Budget 2026 means for you
If you’re wondering how Budget 2026 affects household finances, we explain what changed and what it means for you and your family.
Latest UpdateBudget 2027 announced on 6 October
29/09/2026: Budget 2027 will be announced next Tuesday, 6 October 2026, with an overall package of around €8.5 billion, including €7 billion in additional spending and €1.5 billion in tax reductions.
While nothing is confirmed until Budget Day, measures currently being discussed include changes to income tax, social welfare, Fuel Allowance, the Rent Tax Credit, childcare supports and energy costs, including fuel excise and carbon tax.
We’ll update this guide on Budget Day with the confirmed measures and what they mean for your household.
Budget 2026, announced last year, included a planned package of €9.4bn including €8.1bn in additional public spending and €1.3bn ring-fenced for tax measures.
The one-off financial supports of previous years were removed, and more permanent schemes were targeted at the most vulnerable.
Here’s a summary and explanation of the Government’s main announcements.
Energy costs
Even though energy prices stabilised, households continued to face financial pressure from high gas and electricity costs. The extension of the VAT cut was helpful, but the end of electricity credits removed a key support that had eased the burden for many.
What changed?
The Government announced a raft of measures to help with high energy bills.
What it meant for you
- The increase in weekly Fuel Allowance meant an extra €140 to cover bills during the annual fuel allowance season.
- There was no one-off credit for electricity bills last year, but the reduced 9% VAT rate on bills remained in place until 2030.
- If you qualified for Working Family Payment, you were able to claim the Fuel Allowance, which was worth €38.00 per week.
- The €7.50 Carbon Tax rise meant around €17.00 was added to household gas bills annually. This increase affected coal, gas, home heating oil, and briquette prices from October 2026, after being deferred from May 2026.
- Homes that exported their excess renewable energy back to the grid continued to benefit from a €400 income disregard for a further 3 years.
Housing costs
Although mortgage rates in Ireland fell in 2025, Ireland still had relatively high housing costs compared to other European countries. Despite the downward trend, renters were still bearing the brunt of rising rates between 2022 and 2024, so the Government extended measures to help with housing costs.
What changed?
What it meant for you
- If you’re a homeowner with a mortgage between €80,000 and €500,000, you qualified for 20% tax relief on the extra interest paid on your mortgage between 2022 and 2024. You needed to apply for the relief through Revenue’s Online Service.
- If you were renting your property and were a PAYE taxpayer, the tax credit reduced your tax by €1,000. You could claim the tax credit for rent payments made in previous years by applying to Revenue. You could claim it individually if you lived with others or were part of a couple to double the relief.
Transport costs
Transport initiatives were allocated €4.7 billion for 2026, with a focus on public transport. The MetroLink project was also allocated €2bn, as previously announced.
What changed?
What it meant for you
- The Carbon Tax rise meant that petrol and diesel prices went up from 8 October 2025. Motorists could expect to pay an extra €1.28 for petrol and €1.48 for diesel when filling a 60-litre tank.
- The 20% fare discount, which meant a saving of €2 on every €10 fare, was continued, potentially saving commuters hundreds of euros.
- The extra funding for various transport schemes was intended to provide better, more efficient public transport services across cities and towns.
Work, Taxes and Pensions
With most Irish residents paying some form of tax, the announcements on USC, tax credit increases and income tax cuts affected almost everyone.
What changed?
VAT
The VAT rate for food and catering businesses and hairdressing services was reduced from 13.5% to 9% from 1 July 2026, but there was no change for hotels, bars and pubs.
Pensions
The Auto-Enrolment Retirement Savings Scheme, known as My Future Fund, started on 1 January 2026.
From January, contributions from employees, employers and the State were collected through payroll. In 2026, employee contributions were 1.5% of gross salary, employer contributions were 1.5%, and the State topped it up by 0.5%.
What it meant for you
- The minimum wage boost meant an extra €24.38 per week if you worked 37.5 hours weekly. This worked out at around €106 per month or €1,268 per year (before tax).
- Because the 2% USC band was expanded, people who were near the old threshold paid the lower 2% rate over a slightly larger portion of their income. This helped to soften the tax burden as wages increased.
- Thanks to the USC concession extension, those with a medical card and under the income limit continued to benefit from a lower USC rate.
- If you were in salaried employment, you were auto-enrolled into a workplace pension. Your contribution was 1.5% of your gross salary; your employer’s contribution was 1.5%, and the State topped it up by 0.5%.
Education & Childcare
In good news for students, a €500 permanent reduction in student fees was announced, and an additional 20,000 students became eligible for student grants due to the increase in the household income threshold for SUSI to €120,000. Parents also benefited from additional funding for childcare and special education.
What changed?
What it meant for you
- You paid around €500 less in fees if you were headed to college or Uni in 2026. The student contribution fee was permanently reduced from €3,000 to €2,500, while more students were able to access support due to the higher parental income limits.
- Due to the income threshold for SUSI grants, more students qualified for the €500 support grant.
- Parents were able to claw back more to cover childcare costs in 2026, and approximately 35,000 more children benefited from increased funding for the National Childcare Scheme (NCS).
- If your child had additional needs in school, more support and funding became available. It was proposed that 860 extra special education teachers would work across various Special Educational Needs (SEN) settings, plus 1,717 additional special needs assistants (SNAs) across primary, post-primary, and special schools from September 2026.
Benefits
In 2026, the Department of Social Protection provided a €10 rise in weekly social welfare payments, such as the State Pension, Carer’s Allowance, disability payments, and Jobseeker’s Allowance. However, many one-off payments from previous years were withdrawn.
What changed?
State pension
The State Pension is paid to people from the age of 66 who have paid enough PRSI. From January 2026, it increased to €299.30 per week.
From 1 January 2026, pensioners saw an increase of €10 per week and were able to claim their pension anytime between the ages of 66 and 70.
All PRSI rates increased by 0.1% on 1 October 2026.
What it meant for you
Low-income working families were set to benefit the most from Budget 2026. If you received social welfare, a pension or disability allowance, you got an extra €10 per week. There were no one-off supports that year.
- If you received welfare payments, the €10 increase could mean an extra €43 per month, which was €520 per year.
- The income disregard for the Carer’s Allowance and income limit for Carer’s Benefit increased, meaning extra financial support if you were caring for a loved one or had to give up recent employment to do so.
- Families also got a boost to help with rising living costs. If you received the Working Family Payment, you qualified for the Fuel Allowance from March, and more families could qualify due to the income threshold rising.
- If you were aged over 66 and receiving your pension, you got €10 extra per week and your pension rose to €299.30.
You can find out more about qualifying benefits and new payment rates from the Department of Social Protection.
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