Budget 2017 – What to Expect

Budget 2017 is getting closer – it will be announced on 11th  October 2016 .  Since the new  “Partnership” Government was formed we have had a better idea of some of the changes that might be announced in Budget 2017.

Budget 2017 Possible Changes

USC  Reductions:  There will be reductions in USC in Budget 2017 .  The  FF manifesto  said they would abolish USC for earnings under €80,000 but charge 8% USC on income over that.
FG originally planned to reduce the main rate from 5.5% to 4.5% in 2017 followed by a gradual phasing out of USC by 2021.
The program for government just states that ” Reductions will be
introduced on a fair basis with an emphasis on low and middle income earners..”
The Dept of Finance has recommended  increasing the entry threshold for USC from €13,000 to €14,000 .
Recent leaks suggest that a 0.5% cut to the two lower rates of USC could be made (meaning they would go down to 2.5pc and 0.5pc respectively).

But we will have to wait till Budget day to find out exactly what option is chosen.

Income Tax increase for high earners:  Both the FF and FG manifestos proposed  to remove the PAYE tax credit of €1650 for those earning over €100k . FF also planned to reduce it for those earning over €70k. Removal of this tax credit would result in employees paying €1650 a year more in income tax (€137.50 a month).  This removal is probably to stop high earners benefitting too much from any USC reductions. Someone earning €100k would be paying about €29k tax a year – so an extra €1650 wouldn’t be a big difference.

Reduced Income Tax for Self Employed :  The new program for government states that the “Earned Income Tax Credit will be raised from €550 to  €1,650 for the self-employed  by 2018.”   So we can  expect an increase to about €1100 in Budget 2017.  This would mean €550 less income tax in 2017 for the self employed.

DIRT – The Tax Strategy Group has suggested a drop in DIRT  from 41% to 40% – but will the government listen?

Landlords :  There has been talk of increasing the percentage of mortgage interest that can be claimed as ane expense by landlords. It is currently 75% – it will probably be increased to 80% in Budget 2017. This is supposed to help increase properties available for rent.

Farmers : Currently, farmers’ income is taxed on an average basis over five years. But there is talk that Budget 2017 will bring about changes that will allow farmers, during years when profits are down, to pay tax based on their actual income for that year.

Help to Buy – some type of grant or tax refund will be introduced in Budget 2017 to assist first time home buyers . The full details are not known yet. It might be in the form of a VAT refund or it could be a top up on savings for a mortgage deposit by as much as 25 per cent, up to a maximum of €5,000 per person. (Bank of Ireland are already doing something similar for their customers – see  here for details)

The Home Carer Tax Credit will be increased . FF promised to increase it from €1,000 to €2,000. FG said they would  increase it  to 1,650, while also increasing from €7,200 to €10,500 the income exemption.   The Dept of Finance has suggested it should be increased to just €1100 .We will know the final figure in Budget 2017.

Capital Acquisitions Tax
The threshold  on Band A  is expected to be be raised from €280k to €500k over the next few years. (this band includes all gifts and inheritances from parents to their children).  This will mean that no inheritance tax will be due on inheritances passed to children that are worth less than €500k. This increase might be phased in over 2 or 3 Budgets , probably not all in Budget 2017. We expect an increae to €320,000 this year.

Cigarettes : There will almost definitely be higher excise duties on cigarettes. How much ? No one knows yet.

A new Sugar Tax –  This was in the Fianna Fail manifesto –  they planned  a tax on sugar in sweetened drinks that would add an average six cent to a can . This will be announced , but probably won’t begin for another year.


Welfare and Pensions  :
We expect  increases in Budget 2017 to the following : Disability Benefit , Disability Allowance, Carer’s Benefit and Allowance, and Blind Person’s Pension. We also expect the Christmas bonus to be paid in 2016 – (at least a 50% bonus but maybe more)

Increase to the  State Pension and the Living Alone Allowance above the rate of inflation are also expected in Budget 2017 . Fianna Fail are saying they want €5 a week increase- but FG might not agree to that much.

There will also be an annual cap on the Drugs Payment Scheme and reduced prescription charges for medical card holders.

The entitlement to a medical card will be extended to  all children in receipt of the Domiciliary Care Allowance . Approximately 10,000 children will benefit from this initiative.

A new “Working Family Payment” will probably be announced . (Possibly not in place  until 2018).  The FG manifesto stated that this would be a payment to ensure parents working over 15 hrs week get €11.75 per hour min.


Help with Childcare Payments

A new means tested subsidy scheme for childcare will probably be announced in Budget 2017 – for possible implementation by September 2017.



Education :

An increase in third level fees and the introduction of a student loan scheme has been a possibility for a few years – and we think Budget 2017 might see some changes announced  in that area.

School Transport – There is an ongoing review of the School Transport scheme and the charges and concessions.  We expect any changes to be announced in Budget 2017.

Minimum Wage
The Low Pay Commission has  recommended an increase in the national minimum wage of 10 cents per hour. ( New rate of €9.25 per hour. )  If this is accepted by government it will probably also be announced as part of Budget 2017

We will keep watching out for all the Budget 2017 news and forecasts and will keep this page updated with any expected changes.

Last Update Sept 29th

 

Claiming Winter Fuel Allowance

The Winter Fuel Allowance payment was increased to €22.50 from January 2016 – as announced in Budget 2016.

The fuel allowance scheme operates for 26 weeks from the 3rd October 2016 to the first week in April 2017.
If you apply for the Fuel Allowance after the start of the heating season (in October), the allowance will not be backdated. The current  “heating season” begins on October 3rd 2016 and the first payments will go out during that week.

The  Fuel Allowance is a payment under the National Fuel Scheme to help with the cost of heating homes. It is paid to people who are dependant on long-term social welfare or Health Service Executive (HSE) payments and who are unable to provide for their own heating needs.

About 410,000 people get this payment – so the total Winter Fuel allowance paid out nationally is around  €213 Million a year.
This payment is on top of any payment from the “Household Benefit Package” – under which about 400,00 people get €35 a month towards electricty OR €35 a month towards gas all year round. That works out at €420 a year .

Someone getting both the Winter fuel allowance and the household benefit package could be getting €130 a month towards fuel costs during Oct to April.

You may qualify for the winter fuel allowance if you are in receipt of any of these :

* Invalidity Pension * Pre-Retirement Pension * Disability Allowance

* Incapacity Supplement Widow’s or Widower’s (Contributory) Pension

# Widow’s (Non-Contributory) Pension

# Deserted Wife’s Benefit or Allowance

# State Pension (Contributory or Non-Contributory)

# State Pension (Transition)

# Blind Pension

# Prisoners Wife’s Allowance

# One-Parent Family Payment

You will not qualify for a Fuel Allowance if:

You live with someone who is not getting one of the qualifying payments for the Winter Fuel Allowance. Or

You are on a contributory payment and have weekly income above the means test limits (see below)

The assessable income limit in 2014/2015 for a single person under 80 is €330.30

The assessable income limit for a couple (where the qualified adult is under 66) is €483.80

The assessable income limit for a couple (where the qualified adult is 66 or over) is €536.60

Only one payment is paid to a household if there is more than one person that qualifies.

Application Form Here

For more details you can contact :  National Fuel Scheme , Social Welfare Services ,College Road , Sligo. Tel:(071) 915 7100
See Here too

 

If you are on low income – you may also be eligible for financial help to get your home insulated or to upgrade your boiler.  See these articles for more details.

Get Free Insulation with the Warmth and Wellbeing Scheme

Grants towards the cost of a New Boiler

 

Cheapest Gas Prices

Gas Prices in Ireland Compared  (For New customers)
Checked September 2016

Bord Gais Energy (who are now owned by Centrica) have 4  competitors for the supply of Natural Gas in Ireland – FlogasAirtricity , Electric Ireland and Energia .
Shown below is a gas price comparison based on  annual  usage of  165000 kwH per year . (This could be typical usage for homes using gas for both heating and hot water.) We have compared the the cheapest tariffs from each provider for new customers who are switching from their current supplier .

Figures  correct as at Sept 20th 2016   ( including VAT ,  standing charges and carbon tax) Rounded to the nearest Euro.

Company € cent per kwh Standing Chg Annual Bill for 16500kwh Savings
Electric Ireland DD Ebills ** 5.400 92 859 251
Flogas Direct Debit 4.589 91 917 193
SSE Airtricity 4.903 96 974 136
Energia
DD +ebill
5.105 92 1003 107
Bord Gais DD ebill +levelpay 5.282 93.12 1034 76
Bord Gais Std  Rate 5.742 93.12 1110 0

As you can see from the comparison above –  a  Bord Gais  customer on standard rates using  16500 kwH of gas a year would save  €251 over the first  year on their gas bill if they switched to Electric Ireland for gas. (It is a 12 month contract with a €50 penalty for leaving early.)

Note:  It is possible that gas customers who changed suppliers in the past year will be still on special lower tarrifs or fixed rates. The figures shown above are the prices charged for new customers.

**  Electric Ireland price includes €150 cashback

All gas users will also use electricity – so you might get a better overall deal if you get both your gas and electricity from the same supplier. See our page on Dual Fuel Prices Compared

See our page on Cheapest Electricity in Ireland here.

Some fuel providers have discount or promotional codes – check out Discount Alert page for any currrent codes.

If you have an older gas boiler – you could cut your bills even  more by upgrading to a new efficient condensing boiler. There are grants available to help – and you could cut your gas usage and bills by as much as 20% .

See more here about Grants for new Gas Boilers and more here about  Financing of New Boilers

More Money Saving Tips

 

Electricity and Gas Prices Compared

What are the Cheapest Options For Switching Both Gas and Electricity in Ireland ?

Updated September 20th 2016 .

The price comparisons below are based on what would be typical usage in a medium sized house using gas for both heating and hot water. ( 16500 Kwh of  Gas and 3300 kwH of Electricity a year .)

Dual Fuel – Same Supplier :

The current best deal  in this scenario , for  switching both fuels to one supplier , is  from Electric Ireland. They have a dual  fuel bundle that works out at   €1564 in year one for the above usage .  ( €150 cashback offer is included).

SSE Airtricity . Their 10% off gas and 10% off  electricity bundle  would work out at  €1572 in the first year.  (This includes their €150 cashback offer).

The third best deal  for  switching both fuels to one supplier is from Energia .  They work out at a total cost of  €1592 in the first year  (Includes the €50 cashback offer) . You have to use an online promotion code (“CHEAP392”)  to get this deal.

Bord Gais Energy’s lowest dual fuel bundle works out at €1601 in year one.   (€100 cashback offer included)

To get these lower prices with any of the suppliers you have to pay by direct debit and have online billing.

Using Separate Suppliers :

If you want to get your gas and electricity from separate providers – the best overall switching deal is available by switching to Flogas for gas  and to  Electric Ireland for your Electricity  . This combination will work out at  €599 for electricity and €918 for gas  – a  total of €1517 in year one. (The Electric Ireland price includes €150 cashback)

See our Electricity Price Comparison Here

The main message is – if you are have never switched and are still on the standard rates from Electric Ireland or Bord Gais Energy  – then switching provider can save you significant amounts of money. Even staying with the same supplier and changing over to payment by direct  debit and electronic billing can get you a reduced price. Even if you switched supplier a couple of years ago – it could be worth switching again

Figures  were calculated  to the nearest euro  September 20th 2016  using published tariffs and standing charges on suppliers websites and including VAT, the PSO Levy on Electricity  and Carbon Tax on Gas.
The prices given are for new customers only .

When you  switch electricity suppliers you will need your  MPRN . This is an 11-digit number printied on your electricity bill. If you don’t have it, you can get it by calling ESB Networks on 1850 372 757.

If you’re switching gas suppliers they will need your GPRN . This is a 7-digit number printied on your gas bill. If you don’t have it, you can get it by calling Gas Networks Ireland on 1850 200 694.

You could obviously save even more money on your electricity bills by cutting  energy use . For  example –  switching any halogen downlighters to Gu10 LED  Low Energy Bulbs (Savings as much as 90%  compared to Halogen 50 watt!)

Insulating your home can also cut your energy bills – see our article about grants for insulation.