Budget 2023 is just over a week away, and supports are expected to focus on middle and lower income earners who have been worst affected by the rising rate of inflation.
The cost of living package in this year's Budget is expected to cost at least €2 billion, the biggest cost of living package in Budget history. Those earning between €35,000 and €50,000 look set to benefit from a range of new measures that are expected to be introduced in this year's Budget.
Meanwhile, Government officials are considering a change to income tax bands, which could see workers earning an annual salary of €50,000, taking home at least €500 extra. As part of Budget 2023, Minister for Finance Paschal Donohoe is expected to increase the 40 per cent income tax band by €2,500, meaning workers won't have to pay the higher tax rate on any earnings below €39,500.
Read more: Budget 2023: Thousands in line to receive €500 boost to pay packet
What is a middle-income earner's wage in Ireland?
In Ireland, those who receive a between €35,000 and €50,000 are described as middle-income earners.
Here is a look at what we know so far for middle income workers:
Tax Cuts
Tax cuts that would cost a total of €1.8bn are being considered by the Government in Budget 2023. Ministers are considering increasing standard income rate bands by €2,500 and an increase in personal tax credits of €100 for single people to €1,800 and a €200 increase for married people to €3,600.
The PAYE credit may also be raised by €100, from €1,700 to €1,800. Tanaiste Leo Varadkar has promised tax cuts that would help “squeezed” middle-income earners the most.
“The most important thing is that middle-income people will see a substantial reduction in the amount of income tax they pay,” Mr Varadkar said earlier this month.
Petrol and Diesel costs
The Government is also considering extending the cut on excise duty of 9pc on petrol and diesel that is due to expire at the end of this year for another six months to help offset soaring fuel costs, with middle income earners set to benefit from this.
Energy Payments
Sky-rocketing energy bills are not likely to let up anytime soon, and according to latest CSO figures electricity costs has jumped by more than 86 per cent in 12 months.
To combat this, a total of three €200 energy credits have been proposed by Government. Green Party leader Eamon Ryan has indicated that one payment could be made before Christmas, with the other two €200 lump sums to be paid before spring.
Education
Fees for third-level students could be reduced by up to €250 a year for students paying €3,000 a year in college fees. It comes as young people are pleading for the government to reduce college fees and raise the national minimum wage for under-20s so they can afford to live in Ireland.
This comes after over 70 percent of young people aged 18-24 admitted that they are considering moving abroad because they think they would enjoy a better quality of life elsewhere. The National Youth Council of Ireland has expressed their concern regarding the impact the cost-of-living crisis is having on young people in Ireland and is calling for action from the Government to prevent young people from moving abroad.
Social Welfare and Sick Leave
Predictions have been made that that all social welfare recipients will receive an additional once off payment during autumn. This would be similar to a Christmas bonus allocated last year, which saw people receive an additional €20 on their social welfare payments.
Leo Varadkar has also said there may be a new law on sick leave, entitling almost all workers in the State to sick pay of up to €110 per day, would come into effect in 2023. However, unions have criticised deferring the new law until next year which was initially planned to come into effect this month.
Child Benefit
A once-off child benefit payment is also being considered to support families, which is expected ahead of the Christmas season. Parents with one child could receive €280 under this proposal, while parents with two children would be entitled to €560.
The move would be a huge boost to parent, who would be in line for a €280 one-off payment if they have one child or €560 if they have two. Meanwhile, a family with three children is eligible to receive €840 if the Government agrees to the policy.
A family with twins would also get €840 as they receive one-and-a-half times the normal rate per child.
Childcare
It is understood that Government is also aiming to reduce childcare costs by €200 per month next year and a further €200 per month the following year. Children's Minister Roderic O'Gorman previously said he hopes to see childcare fees fall by 50 per cent over the next two years.
The move would be a huge boost to parents from middle income backgrounds, who are feeling the squeeze from childcare in recent months.
Read Next:
- Social welfare Ireland: Pension hikes announced for people who work until they are 70
Three social welfare payments that can help pay for rising gas and electric
Bonus energy payment expected to soften bills blow before Christmas
Budget 2023: Double payments, Christmas bonuses and energy credits among cost of living measures
Social Welfare Ireland: Payments of up to €924 to tackle energy crisis costs just 9 days away
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As an expert with a deep understanding of economic policies and government budgets, I can confidently analyze the information provided in the article on Budget 2023. My expertise is grounded in a comprehensive knowledge of fiscal measures, taxation, and economic trends.
The article outlines several key concepts related to Budget 2023 in Ireland, with a particular focus on addressing the needs of middle and lower-income earners affected by inflation. The following are the main concepts discussed:
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Cost of Living Package:
- The Budget is expected to allocate at least €2 billion for a cost of living package, the largest in Budget history.
- The package aims to support middle and lower-income earners who have been adversely impacted by the rising rate of inflation.
-
Income Tax Changes:
- The government is considering changes to income tax bands, potentially increasing the 40 percent income tax band by €2,500.
- This adjustment would allow workers earning an annual salary of €50,000 to take home at least €500 extra, as they won't have to pay the higher tax rate on earnings below €39,500.
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Middle-Income Earners Definition:
- In Ireland, individuals earning between €35,000 and €50,000 are classified as middle-income earners.
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Tax Cuts:
- The government is contemplating tax cuts amounting to €1.8 billion, including:
- Increasing standard income rate bands by €2,500.
- Raising personal tax credits for single and married individuals.
- Potentially increasing the PAYE credit.
- The government is contemplating tax cuts amounting to €1.8 billion, including:
-
Fuel Costs:
- There is consideration to extend the 9 percent cut on excise duty for petrol and diesel for another six months to help offset soaring fuel costs.
-
Energy Payments:
- The government is proposing three €200 energy credits to mitigate skyrocketing energy bills, with potential payments before Christmas and in the spring.
-
Education Fees:
- There is a proposal to reduce third-level student fees by up to €250 per year, aiming to ease the financial burden on students.
-
Social Welfare and Sick Leave:
- Predictions suggest an additional one-off payment for all social welfare recipients during autumn.
- A potential new law on sick leave, entitling workers to sick pay of up to €110 per day, may come into effect in 2023.
-
Child Benefit:
- A once-off child benefit payment is being considered, with varying amounts for parents based on the number of children.
-
Childcare Costs:
- The government aims to reduce childcare costs by €200 per month in the coming year and a further €200 per month the following year.
These measures collectively indicate a comprehensive strategy to address the economic challenges faced by middle and lower-income individuals in Ireland, covering aspects such as taxation, energy costs, education, social welfare, and childcare.
