On Tuesday, 27th September 2023, Ministers Pascal Donohue and Michael McGrath delivered the Budget 2023 – coined the ‘Cost of Living’ Budget.
The €11 billion budget included a one-off cost of living package worth €4.1 billion, benefiting a number of sections of society including social welfare recipients, third-level students and renters.
Budget 2023 Highlights
Here we compiled the main provisions announced for near year under Budget 2023:
Education
A significant reduction in the fees by third-level students was announced, with a reduction of €1,000 announced with immediate effect – a welcome announcement to parents of college students.
In addition families earning under €100,000 will receive a further permanent €500 reduction. Families earning under €62,000 p/a will also not pay college registration fees of more than €1,500.
Recipients of the SUSI grant are to receive a double payment before Christmas, and PHD students are also set to be given a once-off cost of living payment as part of Budget 2023.
Primary school students are to now get their schoolbooks for free from next September, and approximately €10 million was put into the school bus scheme.
Health
In-patient fees in hospitals have been ceased. The free GP visit card has been extended to an additional 430,000 people – meaning half the population will have either a free GP visit card or medical card.
Budget 2023 has seen a publically funded IVF treatment model also announced, due to begin next year with the support of a multi-million euro fund. The age range for the Free Contraception Scheme for women has been extended from 25 and under, to those aged 30 and under.
Housing
The long-anticipated decision was made regarding the Help to Buy Scheme which saw it being extended for an additional two years until the end of 2024, granting first-time buyers up to €30,000 in tax rebate.
Another significant commitment was made in the form of a tax credit for renters, whereby taxpayers who rent will receive €1,000, split into two credits – one applying this year and the second applying next year.
Two other notable announcements included the introduction of a Vacant Property Tax for homes that have been occupied for less than thirty days in a twelve-month period, and Penal Tax for Concrete Products.
For a more comprehensive breakdown of housing outcomes from the budget, visit this article by Waterford Architects, Fewer Harrington & Partners.
Households & Personal Finance
In combating the rising cost of energy, a €600 electricity credit was announced in Budget 2023 for households which will be paid over three bills. Childcare fees are also to be cut by 25%.
As well as a minimum wage increase to €11.30 per hour, the threshold for the top tax rate has been increased to €40,000 – meaning that a single person would make a tax saving of more than €600.
The personal tax credit is to rise to €1,775 from €1,700, with the same increase due for the employee tax credit and the earned income tax credit. The 2% USC rate band is to increase from €21,295 to €22,920.
For advice in relation to tax and planning, including tax-efficient investing and inheritance tax planning, visit Moore Wealth Management for your financial planning needs.
Businesses
Under a new Temporary Business Energy Support Scheme (TBESS), businesses are to receive up to €10,000 a month to help with energy bills. This is estimated to cover 40% of the increase in electricity or gas bills.
Budget 2023 announced the hospitality and tourism sector’s 9% VAT rate for certain activities is due to continue until the 28th February 2023. The annual limit on vouchers that employers can give their staff will rise from €500 to €1,000. Additionally, two vouchers may be given under the exemption in this tax year.
Social Welfare
The universal weekly welfare rates are to increase by €12 from January 2023, at a cost close to €1 billion next year, with increases kicking in from the beginning of 2023. A double payment will be granted under the cost of living package in the coming weeks, with another scheduled for Christmas.
Fuel Allowance’s eligibility is set to be widened with payments increased, as well as a once-off payment of €500 for carers of people with disability and for families availing of the working family credit announced.
Other key announcements from Budget 2023 include a one-off €200 payment for anyone on the Living Alone Allowance, and a €20 increase to the domiciliary care allowance for ill children.
Farming
In an effort to incentivise saving hay and fodder, a Fodder Support Scheme will pay farmers up to €1,000 for doing so in 2023. and a €8 million graint aid scheme will be introduced to support the spreading of lime.
A scheme for beef farmers will replace the €28 million beef environmental efficiency programme for sucklers. A similar level of funding is believed to be allocated for this scheme.
In incentivising the increase in tillage crops to reduce the dependency on imported feed material, a €10 million tillage incentive scheme support measure was announced.
A number of farming-related tax reliefs are to be extended, subject to agreement with the EU, such as enhanced stock relief, stamp duty for young-trained farmers, farm restructuring CGT relief and more.
For the construction of modern slurry storage facilities, accelerated capital allowances are to be granted.