Money saving guides

What Budget 2024 means for you

If you’re wondering how this year’s Budget affects your household finances, we explain what’s changed and what it means for you and your family.

With a total package worth €6.4bn, this year’s budget includes €1.15bn in tax cuts, a boost for low earners and help with energy costs. Here’s the Government’s main announcements.

Energy costs

The last 18 months have been difficult, with energy price hikes adding financial pressure to householders already struggling with steeper food and fuel costs. The electricity tax credit worth €600 eased the burden for many.

What’s changed?

Householders can breathe a sigh of relief with the Government announcing a further raft of measures to help with high energy bills.

  • Energy credits: A further round of energy credits worth €450 has been pledged. Three credits worth €150 each will be paid between December and March.
  • Fuel Allowance: A €300 once-off lump sum will be paid to those eligible for the allowance at the end of the year.
  • Green energy incentives: The tax disregard for income received by households who sell residual electricity from micro-generation back to the national grid is being doubled from €200 to €400.
  • VAT rate on energy: The lower 9% rate of VAT on energy products will be extended by another 12 months.

What it means for you

  • All households will receive the energy credit. So regardless of the size of your home, you’ll get a total of €450 credited to your electricity account. It will be given in three parts; on 1 December 2023, 1 January 2024 and 1 March 2024. It will be an automatic payment, so you don’t have to do anything.
  • If you’re a prepay customer, you should hear from your supplier who’ll let you know credit has been applied to your account and tell you how to redeem it.
  • If you qualify for the Fuel Allowance you’ll get a once-off €300 lump sum. Fuel Allowance gets paid automatically if you are a welfare claimant, but those over 70 will need to apply and get means-tested.
  • If you have solar panels you can now earn up to €400 tax-free when exporting any surplus electricity to the grid.
  • On average, you’ll save €90 a year on your electricity with the extended 9% VAT rate, and €62 on gas.

Housing costs

‘Homeowners and renters have been squeezed by rising mortgage rates and rental costs this year so the Government has introduced or enhanced measures to help with housing costs.

What’s changed?

  • Mortgage Tax Relief: Homeowners with loans between €80,000 and €500,000 will qualify for a mortgage tax break worth up to €1,250.
  • Rent Tax Credit: Those living in rented accommodation will qualify for €750 rent relief, up from €500 last year.
  • Help to Buy (HTB) scheme: The scheme for first-time buyers due to end in 2024 has now been extended until the end of 2025, and those buying homes with the Local Authority Affordable Purchase program can now avail of the HTB scheme.

What it means for you

  • If you’re a homeowner with a mortgage between €80,000 and €500,000 you’ll qualify for 20% tax relief on the extra interest paid on your mortgage between 2022 and 2023. This could be worth up to €1,250, depending on the size of your loan. You’ll need to apply for the relief through Revenue’s Online Service.
  • If you’re renting your property and are a PAYE taxpayer, the tax credit reduces your tax by €750. You can claim the tax credit for rent payments made in 2022 and 2023 by applying to Revenue. Make sure you claim it individually if you live with others or are part of a couple.

Transport costs

Motorists have not escaped inflationary hikes, with fuel prices spiralling up by 30% since January 2021. To help drivers, the government cut the excise duty on fuel in March 2022 and extended it to the end of May 2023. It was due to be fully restored by 31 October 2023.

What’s changed?

  • Excise duty: The plan to restore full excise duty on petrol, diesel and gas oil by the end of October has been shelved until 31 March 2024.
  • Discount travel fares: The 20% discount on public transport fares will be retained for at least another year.
  • Young Adult Card: Young people aged 25 years and under can now enjoy half-price public transport, up from 23 years.
  • VRT Relief Vehicle Road Tax relief for battery electric vehicles (BEVs) is extended to the end of 2025.

What it means for you

  • If your job involves lots of driving or you have a long daily commute, you can breathe a sigh of relief now that the return of petrol excise duty has been postponed. The delay will leave you with more cash in your pocket; the more you travel, the more you’ll save.
  • If you rely on public transport to get around, the 20% fare discount means you’ll save €2 on every €10 fare, which could amount to hundreds of euros if you travel regularly.
  • If you’re 25 years old and under, you can now avail of discounted public transport and save 50% on many bus and train journeys.

Work & Taxes

With most Irish residents paying some form of tax, the announcements on USC, tax credit increases and income tax will affect almost everyone.

What’s changed?

  • Universal Social Charge (USC) The USC will be reduced by 0.5 from 4.5% to 4% and the ceiling for the lower 2% rate will go up by €2,840 to €25,760.
  • Income Tax (PAYE) The ceiling at which workers start paying a higher income tax rate has been raised from €40,000 to €42,000.
  • Tax credits: Personal tax, Employee tax and Earned Income tax credit will increase by €100 to €1,875.
  • Carer Tax Credits: The Home Carer tax credit will increase by €100 to €1,800, the Single Person Child Carer credit will increase by €100 to €1,750 and the Incapacitated Child tax credit will increase by €200 to €3,500.

VAT

VAT was reduced to zero or reduced on many services and products in 2023. The 9% VAT rate will be extended for a further 12 months on gas and electricity and reduced to zero on ebooks and audiobooks from 1 January 2024.

Minimum wage

The Low Pay Commission recommended to the Government that the minimum wage rate should be increased from €11.30 to €12.70 per hour; this has now been confirmed.

What it means for you

  • The reduction in USC, tax credits increase and higher rate threshold change means you’ll keep more earnings at the month’s end. These changes could mean a boost of around €800 per year if you’re in paid work.
  • If you’re earning over €40,000, you could be paying a 40% tax rate on some of your earnings. You’ll now be able to make €42,000 before paying the higher rate.
  • The Universal Social Charge (USC) has been reduced from 4.5% to 4%, so if you have an income between €23,000 and €70,000 you could save up to €230 per year. The threshold at which you pay it has also increased, so if you’re on a low income, you may now only need to pay 2% USC.
  • The minimum wage boost would result in an extra €54.60 a week if you work 39 hours weekly. This works out at an extra €218.40 per month or €2839.20 each year.
  • If you care for a family member, a child with disabilities or a single person with childcare responsibilities, you will also benefit from a €100 to €200 tax credit increase.

Education

In 2023 the government introduced free schoolbooks in primary schools and one-off financial measures to support third-level students alongside grant increases.

What’s changed?

  • The Hot School Meals programme: The hot school meals programme will be expanded to a further 900 primary schools from 24 August.
  • Contribution fees reduction: There will be another €1,000 one-off reduction to the student contribution fee for fee-free students.
  • Free School Books scheme: This scheme, rolled out last year to Primary schools, will be extended to Junior Cycle post-primary students from next year.
  • College grants: The state SUSI grant payments will increase by over €300, meaning the highest student grant will rise from €6,971 to €7,313. There will also be a once-off, €1,000 increase to the postgraduate fee grant - pushing it from €4,000 to €5,000.
  • Renters relief for parents: The renters’ tax credit is being extended to parents who pay for their children’s rent for the rent-a-room scheme (‘digs’). It will apply retrospectively for the years 2022 and 2023.

What it means for you

  • If your child is in their first three years of secondary they will receive free schoolbooks from next September. Other student resources such as copybooks, ­calculators, dictionaries and other classroom resources will be included in the scheme.
  • If you’re a parent of a third level student, you can now apply for the €1,750 rent relief if your child is staying in digs.
  • You’ll also pay around €1,000 less in fees if you’re headed to college next year. The student contribution fee is being reduced from €3,000 to €2,000, while families with an income of less than €100,000 will see contribution fees halved to €1,500.
  • If you receive the SUSI maintenance grant, you’ll get around €300 extra a year, while all non-adjacent maintenance rates will rise by €615.

Childcare costs

Around 40% of workers in Ireland have dependent children and childcare costs, with everything else, have risen sharply in recent years. The National Childcare Scheme subsidy rose €0.50 to €1.40 per hour in January 2023, reducing childcare costs by up to 25%.

What’s changed?

  • Childcare fees: There will be another 25% reduction in childcare fees, but families will have to wait until September 2024 for the reduction to take effect.
  • Parental leave Parent’s Leave and Parent’s Benefit will be extended by two weeks to nine weeks from August 2024.

What it means for you

  • If you have nursery fees to pay, you will need to wait until September 2024 for the further 25% reduction in childcare costs. It’ll be worth the wait because, together with last year’s 25% fee reduction, you’ll see your childcare bill halved by this time next year.
  • If you’re a new parent, you’ll enjoy more time at home with an extension to your parental leave entitlement from August 2024. It has increased from seven to nine weeks, giving mothers and fathers more time to spend with their newborn.

Benefits

A broad range of extra support was introduced by the Department of Social Protection last year to reduce the impact of the cost of living crisis. With high inflation and energy prices still impacting people during 2023, the Government has announced a further raft of support.

What’s changed?

  • Child benefit: There will be a once-off double payment of child benefit before Christmas, and those with children over 18 who are still in secondary school will continue to qualify.
  • Social welfare: Those receiving social welfare payments are set to get an extra €12 per week.
  • Christmas bonus: The annual bonus will be a double payment again in early December to all receiving social welfare support.
  • January bonus: As well as the Christmas Bonus, a one-off double payment to all qualifying social protection recipients will be paid in January.
  • Working family payment A bonus of €400 for families who get the Working family payment. A €4 weekly increase plus a once-off €100 for those who get the Qualified Child Increase. Thresholds will increase by €54 regardless of family size.
  • Disability Supports: A once-off payment of €400 for people getting Disability Allowance, Invalidity Pension and the Blind Pension.
  • Carers Support Grant: A lump sum of €400 will be paid to those receiving the Carer’s Support Grant.
  • Jobseekers Allowance: A new Pay Related Jobseekers Benefit scheme will be introduced in 2024, which will link a person’s jobseeker’s payment to their previous earnings and work history.

State pension

The State Pension is paid to people from the age of 66 who have paid enough PRSI. It is currently between €265.30 and €287.30, which is around €13,800 per year

From 1 January pensioners will see an increase of €12 per week and be able to claim their pension anytime between the ages of 66 and 70.

In January all those receiving the state pension will get a once-off double payment in January 2024.

All PRSI rates will increase by 0.1% on 1 October 2024.

What it means for you

If you receive social welfare, you’ll get cost-of-living support, bonus payments around Christmas and New Year, and an increase in your weekly benefits.

  • If you receive welfare payments, the €12 increase could mean an extra €52 per month, which is €624 per year. If you’re in receipt of one of the Disability Allowances or Carers Support grant, you will receive a lump sum of €400 to help towards the rise in food, fuel and day-to-day living expenses.
  • Families also get a boost to support the unprecedented rise in living costs with bonus child benefit payments worth €280 per child and an extension for those with children at secondary school over 18. If you receive the working family payment, you’ll get a bonus of €400 and an extra €100 if you have an extra qualifying child.
  • If you lose your job, a new Pay Related Jobseekers Benefit scheme will soften the income shock by linking your welfare payment to your previous earnings and work history.
  • If you’re aged over 66 and receiving your pension, you’ll get €12 extra per week and be €624 better off per year.

You can find out more about qualifying benefits and new payment rates from the Department of Social Protection.

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