The government is set to announce Budget 2025 on Tuesday, with officials engaged in final discussions to finalize new measures aimed at addressing the cost of living crisis.
A series of financial reliefs are expected, targeting rising inflation and offering much-needed support to households across the country.
High-Level Government Meetings
Finance Minister Jack Chambers and Public Expenditure Minister Paschal Donohoe held a key meeting on Sunday evening with Taoiseach Simon Harris, Tánaiste Micheál Martin, and Green Party leader Roderic O’Gorman.
The meeting, held at Government Buildings, aimed to finalize the details of Budget 2025.
Anticipated Measures: Tax Breaks and Welfare Boosts
Tax Reductions and USC Cuts
One of the most anticipated announcements is a significant package of income tax and USC (Universal Social Charge) reductions. Taoiseach Simon Harris has teased a “pro-business package” with changes to the tax system aimed at encouraging innovation and investment.
It is expected that the USC will be cut from 4% to 3% for incomes between €25,000 and €70,000, while the entry point for the higher 40% tax rate may rise from €42,000 to €44,000. These measures form part of a broader €1.4 billion tax package designed to benefit workers and households.
New Vape Tax Likely
The government is also considering a tax on vapes, with discussions underway on how and when it might be introduced. The goal is to implement the tax starting January 1, though this timeline is not yet confirmed.
Energy Credits to Tackle Rising Bills
A key component of the cost of living package will be energy credits, likely ranging between €150 and €250. The exact number of credits and their value remain under review, with Tánaiste Micheál Martin unable to confirm whether one or two credits will be included in the budget.
However, it is expected that these credits will be issued before the end of the year.
Free School Books for Senior Secondary Students
Education Minister Norma Foley has reportedly secured funding to provide free school books to senior secondary school students in 5th and 6th year, extending an existing program that makes all school books free.
Renters’ Tax Credit Increase
In an effort to support renters, the Rent Tax Credit is expected to increase by €250, bringing the total credit to €1,000 per year.
Minimum Wage Hike
The Low Wage Commission has recommended a €1 increase in the minimum wage, raising it to €13.70. While the government typically follows these recommendations, a final decision is yet to be made.
Social Welfare Increases Still Under Discussion
State Pension Increase
The government is also considering increases to social welfare payments. Social Protection Minister Heather Humphreys is advocating for a €15 weekly increase to the State Pension, though a €12 increase seems more likely.
Discussions continue, with pushback from some government factions on raising payments for long-term unemployed individuals.
Jobseekers’ Payment
It is unlikely that Jobseekers will receive a similar increase, given the country’s current near-full employment status.
Two Christmas Bonus Payments for Welfare Recipients
Social welfare recipients could be in line for two bonus payments this year. The first would be the traditional Christmas bonus in December, while a second bonus could be paid out in October.
This additional payment is still under consideration.
Potential Child Benefit Increase
Families may see a €10 monthly increase in child benefit payments, which would raise the amount from the current €140 per month. However, it is unclear whether both this increase and a double Christmas bonus can be accommodated in the budget.
Fuel Allowance Expansion
The Fuel Allowance, which runs from September to April, could see expanded eligibility in Budget 2025. Currently, the allowance is available to those over 70 or individuals on long-term welfare payments.
Discussions are underway to lower the age threshold to 66, potentially making more people eligible for this support.
SUSI Grants Set for a Boost
Higher Education Minister Patrick O’Donovan is expected to announce a 15% increase in SUSI (Student Universal Support Ireland) grants.
Additionally, the income threshold for qualifying for the full grant will rise from €55,924 to €64,312.60, making higher education more accessible for families.
Increase in Inheritance Tax Threshold
The inheritance tax threshold for those receiving assets from parents is set to rise. Currently, the threshold is €335,000, after which a 33% tax applies. Budget 2025 is expected to increase this threshold to €400,000.
Budget 2025 promises to introduce a wide range of measures aimed at alleviating the financial pressure on households, from tax cuts and energy credits to welfare increases and expanded educational supports.
Final decisions on several key proposals are expected as the government completes its budget negotiations.
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