Money saving guides

What Budget 2025 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.

This year’s budget includes €1.6bn in tax cuts, and a €2.2bn cost of living package targeted at low earners and those on welfare. Here’s a summary and explanation of the Government’s main announcements.

Energy costs

Energy prices have continued to add financial pressure to households already struggling with higher food and fuel costs. Electricity credits handed out last winter eased the burden for many and return again this year, albeit at a lower rate.

What’s changed?

The Government has announced a further raft of measures to help with high energy bills.

  • Energy credits: An energy credit worth €250 will be paid to all bill-paying households, one payment of €125 before the end of 2024 and the other in January 2025.
  • Fuel Allowance: This means-tested allowance will be extended to all eligible pensioners and those receiving Carers Allowance. A €300 once-off lump sum will be paid to those eligible for support.
  • VAT rate on energy: The lower 9% rate of VAT on energy products will be extended by another 6 months to 30 April 2025.
  • Green energy incentives: Heat pumps will qualify for the reduced rate of 9% VAT and Carbon Tax to rise by €7.50 per tonne each year until 2029.

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 €250 credited to your electricity account in two instalments. 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 66 will need to apply and get means-tested.
  • Gas suppliers in Ireland are obliged to add a carbon tax charge to all customers’ bills. The €7.50 per tonne rise, will mean around €17.00 will be added to gas customer bills annually.

Housing costs

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

What’s changed?

  • Rent Tax Credit: Those living in rented accommodation will qualify for €1,000 rent relief, up from €750 last year. Couples can claim up to €2,000.
  • Mortgage Tax Relief: The tax break which means that homeowners with loans between €80,000 and €500,000 qualify for relief worth up to €1,250 will continue for another year.
  • Help to Buy (HTB) scheme: The scheme for first-time buyers due to end in 2025 has now been extended until the end of 2029.

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 2024. 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 €1,000. You can claim the tax credit for rent payments made in previous years by applying to Revenue. Make sure you claim it individually if you live with others or are part of a couple.

Transport costs

Families, carers and relatives of the elderly and young people all benefit from Budget 2025 measures this year.

What’s changed?

  • Free public transport Children under age of nine years can now travel free and a ‘Universal Companion Pass’ for all over 70s means that if you are accompanying an elderly relative, you can travel for free on buses, trains, the DART and the luas.
  • Discount travel fares: Fare initiatives on public transport, including the Young Adult Card and the ninety-minute fare, continued to end of 2025.
  • Carbon tax on fuel rise Petrol and diesel prices are being hiked due to an increase of €7.50 in the Carbon Tax rate per tonne.

What it means for you

  • The Carbon Tax rise means that petrol and diesel prices will go up. The change, on 9 October, means that motorists could pay an extra €12 per full tank.
  • If you regularly chaperone an elderly relative or friend to hospital appointments or similar, you can travel for free with them.
  • The 20% fare discount which means you’ll save €2 on every €10 fare is being extended through 2025, potentially saving commuters hundreds of euros. Students and young adults can continue to enjoy even bigger 50% discounts.

Work & Taxes

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

What’s changed?

  • Universal Social Charge (USC) The USC will be reduced from 4% to 3% on incomes between €25,760 and €70,044. The ceiling for the 2% band will rise by €1,622 to €27,382.
  • Income Tax (PAYE) The ceiling at which workers start paying a higher income tax rate has been raised from €42,000 to €44,000.
  • Tax credits: Personal tax, employee tax and earned Income tax credit will increase by €125.
  • Carer Tax Credits: The Home Carer tax credit will increase by €150, the Single Child Carer credit will increase by €150 and the Incapacitated Child tax credit will increase by €300.

VAT

The 9% VAT rate will be extended for a further 6 months on gas and electricity.

Minimum wage

The Minimum Wage will increase from €12.70 to €13.50 per hour from 1 January. This means an annual increase of around €1,500 for full-time workers on a minimum wage.

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 you’re at least €1,000 per year better off.
  • You’ll now be able to earn €44,000 before paying the higher 40% tax rate on some of your earnings, so middle income earners will be giving less tax away.
  • 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 €31.20 per week if you work 39 hours weekly. This works out around €134 per month or €1612 per year (before tax).
  • If you care for a family member, a child with disabilities or a single person with childcare responsibilities, you will also benefit from a €150 to €300 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. These measures are set to continue into 2025 and beyond.

What’s changed?

  • Fee reductions: Students will get €1,000 off their college fees and postgraduate students will welcome a fee contribution grant increase from €4,000 to €5,000.
  • The Hot School Meals programme: The Hot School Meals programme will be extended to all primary schools in 2025 and a school meals holiday hunger pilot project will commence.
  • Contribution fees reduction: There will be another €1,000 once-off reduction to the contribution charge for home and EU undergraduates. The apprentice contribution will also decrease by 33%.
  • Free School Books scheme: This initiative is being extended to all transition and Leaving Cert pupils in recognised post-primary schools within the free education scheme.
  • College grants: There will be a once-off, €1,000 increase to the postgraduate fee grant - pushing it from €4,000 to €5,000. The SUSI maintenance grant will increase by 15% and household income thresholds have increased to ensure wider access to support.

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.
  • Wherever you live and whatever primary school they attend, your child will have access to a free hot school meal. The scheme will roll out on a phased basis starting in April 2025.
  • You’ll also pay around €1,000 less in fees if you’re headed to college or Uni next year. The student contribution fee has been pegged back again from €3,000 to €2,000, while more students will be able to access support due to household income thresholds rising.

Childcare costs

Around 40% of workers in Ireland have dependent children and childcare costs, with everything else, have risen sharply in recent years. Funding for the National Childcare Scheme will rise by 44% which will reduce full-time childcare costs by up to €1,100.

What’s changed?

  • New baby boost: Parents of newborns will receive a one-off baby boost of €420.
  • Parental benefits €15 increase in maternity, paternity and parents’ benefits.
  • Childcare fees: Further childcare scheme funding will result in a reduction of full-time childcare costs of around €1,000.
  • Bonus Child Benefit payments: Child benefit will be doubled up in November and December to help families around Christmas. worth €280 per child.

What it means for you

  • New parents will receive a financial helping hand with the €420 “baby boost” and more money in their pocket thanks to the €15 weekly rise in parental benefits.
  • Parents paying nursery fees are only just starting to benefit from the pledged 25% reduction in childcare costs which started in September. The latest cash injection will mean parents will see further reductions in child care costs - saving on average €1,100 per year.
  • The doubling of Child Benefit paid out in November and December is worth €280 per child - a welcome boost for families during the most expensive time of the year.

Benefits

This year the Department of Social Protection is providing a further raft of once-off cost-of-living supports, alongside a €12 rise in weekly social welfare payments such as the state pension, Carer’s Allowance, disability payments and Jobseeker’s Allowance.

What’s changed?

  • Social welfare and pensions: Those receiving social welfare payments and pensioners are set to get an extra €12 per week.
  • Increases in Carer’s Allowance An increase in the Carer’s Allowance means test to €625 per week for a single person and €1250 per week for a couple. Carer’s Support Grant will be increased to €2,000 and Carer’s Benefit will be extended to self-employed carers.
  • Child Benefit: There will be a double payment of Child Benefit in November and December worth €280 per child.
  • Christmas bonus: The annual bonus will be a double payment in December to all receiving social welfare support.
  • Welfare double payments All welfare recipients will receive a double payment in October and another before Christmas.
  • Working family payment: A bonus of €400 for families who get the Working family payment and a once-off payment of €100 for those who get the Qualified Child Increase.
  • Living Alone Allowance: A €200 lump sum for people who are in receipt of the Living Alone Allowance.
  • 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 and a €100 bonus payment to those getting the Child Support Grant.

State pension

The State Pension is paid to people from the age of 66 who have paid enough PRSI. From January 2025 it will be €289.30.

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.

All PRSI rates will increase by 0.1% on 1 October 2025.

What it means for you

If you receive social welfare, you’ll get extra cost-of-living support which includes bonus payments, and an increase in 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. 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’re aged over 66 and receiving your pension, you’ll get €12 extra per week and your pension will rise to €289.30.

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

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