The big talking points following the announcement of Budget 2022
Minister for Finance Paschal Donohoe and Minister for Public Expenditure Michael McGrath have delivered their Budget 2022 speeches in the Dáil, announcing a package of €4.7 billion.
Here are the big takeaways and talking points from Budget 2022:
The big picture
We will spend more money as a country - Core spending will increase by 4.7% in this Budget. Minister Donohoe also confirmed an additional 400,000 jobs will be added to our economy between 2021 and 2022. This would increase the employment rate by 8%.
Minister Donohoe confirmed that Ireland's debt will come in a €240 billion next year. He said this Budget would address the needs of today and put the country's public finances on a sustainable path.
Inflation will hit 3.7% in September, the highest since 2008.
Income tax bands will change. Workers will now be able to earn €36,800 before hitting the higher rate of 40%. This is a €1,500 increase from €35,300. Income tax credits to rise by €50.
The second rate of USC will increase from €20,687 to €21,295, meaning a little more money in workers pockets.
VRT rates for cars will increase again from January. There will be a 1% increase for cars falling into bands 1 to 12, 2% for cars in bands 13-15 and a 4% increase for cars in bands 16 to 20.
While Paschal Donohoe wanted to retain Ireland's corporate tax rate of 12.5%, it will rise to 15% in line with global deal. The new higher rate will only apply to businesses with profits above €750m.
€5 increase in core social welfare rates
€5 increase for old age pension recipients
There will also be an additional €3 per week on the Living Alone Allowance.
Back to School clothing allowance to increase by €10.
Fuel allowance weekly rate increasing by €5 from midnight tonight
The full Christmas bonus will return for social welfare recipients this year
Climate and fuel
Carbon tax will jump 7.5% in 2022 and every year until 2030.
This means the price of home heating fuels like oil, as well as petrol and diesel will increase further. This follows steady increases in motor fuel costs already over the last few months.
A full tank of diesel could increase by as much as €1.50 from October 13, with petrol going up by around €1.30 a tank.
Carbon tax excess will be used to fund a retrofitting programme to upgrade homes for home energy purposes.
€202 million will be spent on retrofitting homes with energy efficiency upgrades next year on 22,000 homes.
€6 billion has been allocated to the Dept of Housing
The State will spend €20 billion over the next five years to provide 4,000 new affordable homes and 9,000 social homes.
Current rates and mechanics of Help-To-Buy Scheme for first-time buyers will continue next year. It is currently capped at a €30,000 rebate.
A new levy will be put on zoned and serviced properties not being used by the owners. It will be 3% of the value of the property. Councils around the country are preparing maps for this new levy.
The old reliables
A packet of 20 cigarettes will increase by 50 cent. A packet of cigarettes will now cost €15. Other tobacco and nicotine will see an increased excise in line with this rise.
There has been no increase in excise on alcohol.
800 more gardaí will be recruited
There will be "no cliff-edge" for Covid business supports like the employment wage subsidy scheme (EWSS) - This scheme will remain in place in a graduated form until the end of April 2022.
The national minimum wage will increase 30 cent to €10.50
The special 9% VAT rate for tourism and hospitality industry brought in as a result of the pandemic is extended to August 2022.
There will be an extension of corporate tax relief for small businesses and start-up companies. This will now be available for five years, up from three.
Income from the bank levy will fall to €87m from €150m as Ulster Bank and KBC exit. As they are leaving the market in Ireland, they won't be included in the levy next year.
There will be a new support and incentive for those working from home in the shape of an income tax deduction of 30% against costs of heat, electricity and broadband when working from home.
€250 million has been announced for an acute waiting list action plan to tackle waiting lists in hospitals.
Free GP care extended to 7-seven-year-olds from 5-year-olds. This will continue to increase in future Budgets to eventually cover all kids up to 12 years old.
Free contraception to be supplied to 17-25-year-olds from August 2022
An additional €105 million for disability services in 2022
€37m to fund expansion of mental health services
7,000 new posts will be added to healthcare settings in 2022
ICU capacity to increase long-term to 340 next year, at a cost of €10.5m
€716 million to be invested in childcare in 2022
New funding stream for providers to be set up in September 2022 to improve services and attract more staff.
The National Childcare Scheme will be extended to Under-15s
€9.2 billion allocated to Dept of Education in 2022
980 additional teachers and 1,165 SNAs to be hired
€4m to extend hot meals programme to more DEIS schools
€30 million to expand school transport scheme
SUSI student grants will rise by a flat rate of €200 from next September, benefitting 60,000 students. Qualifying income will increase by €1,000.
The qualifying distance to be eligible for the non-adjacent grant will reduce from 45km to 30km.
3,320 CAO places will be added arising from this year's Leaving Cert
€1.4 billion to invest in public transport infrastructure
Youth travel card to be introduced for 19 to 23-year-olds to avail of a 50% discount on all public transport
Our Budget coverage is brought to you in association with Duggan & Power Chartered Accountants & Registered Auditors
Duggan & Power
2nd Floor, Odeon House, Eyre Square, Galway
Emmet Square, Birr, Co Offaly
Phone + 353 (0) 91 533530
Fax + 353 (0)91 533560
+ 353 (0)5791 21710
+ 353 (0)5791 21000
Email: Liam.Power@ dugganandpower.ie
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