Budget 2017 – What to Expect

Budget 2017 is not as far off as you might think  – 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

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 will mean €550 less income tax in 2017 for the self employed.

DIRT – The Tax Strategt Group has suggested a drop in DIRT  from 41% to 40%

Help to Buy – some type of grant or tax refund will be introduced in Budget 2017 for first time home buyers . The 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)

USC  Reductions:  There will be reductions in USC in 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 .  But we will have to wait till October and Budget 2017 to find out exactly what option is chosen.

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  will be raised from €280k to €500k  (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 , maybe not all in Budget 2017.

Cigarettes : There will 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 .


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.

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 be introduced. (Possibly not 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.


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 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 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 August  17th

 

Student Bank Accounts in Ireland

Most banks in Ireland have special Student Bank Accounts  – and they sometimes offer cashback or other incentives to entice new  students to open an account with them . The Banks are hoping that once they get a new student to sign up – that they will stay with them for life . These are some of the student bank account offers available in 2016.

KBC  are offering to credit new student accounts with €100 .  There are a few terms and conditions as you would expect.  When you open the account it will be credited with €40 straight away.  Then – as long as you have activated online and mobile banking and make 10 debit card transaction before December 31st, another €60 will be paid in January 2017

One feature of student bank accounts that will be attractive to many people  – is an interest free overdraft. Ulster Bank and AIB both offer an interest free overdraft of up to €1500 euro  for students.  KBC and  BOI  also offer 0% interest on authorised  student overdrafts – but no maximum amount is mentioned.

Getting used to having an overdraft can be a hard  habit  to break. Spending money that isn’t yours is not a good thing to get used to. Once the interest free period is over and charges kick in you will soon see those charges mounting.

Bank Fees: None of the banks in Ireland charge admin fees or day to day transaction fees on student accounts – apart from AIB who will charge €4.50 if you want to set up a standing order.

But it is worth noting that most banks will start charging you fees on a current account when you stop being a student. If you are not careful those fees could easly come to over €100 a year.  See more details of Bank Charges in Ireland  here and how to avoid them.

 

Euro Sterling Exchange Rate Update

Euro Sterling Exchange Rate Update : August 17th  2016

1 GBP = 1.155000 EUR                  1 EUR = 0.865801 GBP

Pound Falls Again This Week 

The Bank of England  cut their interest rate to an all time low of 0.25% this month and since then the Pound has weakened against the Euro fall to just below €1.16 .
Sterling had already been hit by the decision of the UK  to leave the EU. Back on May 24th the Pound was worth €1.316 and during the latter half of July it was hovering around the €1.19 mark. Now it is around €1.15 – a drop of  nearly 14% since May 24th.

An analyst at HSBC ( David Bloom)  suggested last week that Sterling could be heading towards parity with the Euro before the end of 2016.

In March , analysts at Goldman Sachs warned that Sterling could fall by up to 20% against the Euro if Britain voted to leave the EU.  Prior to Brexit , UniCredit, headquartered in Milan, suggested that the effects of Brexit  could send the Pound to Euro exchange rate down to €1.11.

With so much  uncertainty in the currency markets at the moment –  it could get very stressful for people or businesses planning large Euro / Sterling exchanges in the next few months.   Using a Currency Broker can remove some of the uncertainty by allowing you to fix an exchange rate as much as 12 months in advance of your transfer.  For good deals on large amounts of currency exchange –  for personal money or  for businesses – see our page on how to get the Best Exchange Rates

You might also be interested in this information about Transferring  Money from Ireland to a UK Bank

If you are just looking to buy some Pounds , Dollars  or other foreign cash for a holiday  – take a look at our page about the best place to buy travel currency in Ireland

 

euro sterling exchange rate ireland

 

Best Prepay Mobile Data Allowances in Ireland

These has been a massive increase in the use of smartphones in Ireland  – it is estimated there were 2.8 million active smartphone SIMS at the start of 2016.
These smartphones are used for much more than simply talking or texting – you can check emails ,  go on Facebook or Twitter , use one of the thousands of apps or just browse the internet.  The average data usage per smartphone user in Ireland was 2Gb per month in Sept 2015. This was up from 0.5Gb a month in sept 2013.

Of course – there are charges for the data you download or upload  with your smartphone (if you are not using WiFi)  – and these charges can soon mount up if you are not careful and exceed the included data in your price plan.

Data charges and allowances on Pay as You Go mobile bundles in Ireland vary quite a bit across the different network providers.  We did a quick comparison of the data costs and allowances  of the main mobile networks  to see which network gives the  Best Prepay Mobile Data Allowances in Ireland August 2016

At  Lycamobile : for  €15 a month you can currently get 30Gb Data , Unlimited  Texts and Unlimited call Minutes to all networks and landlines.  They use the Three network – so coverage will be pretty good in most places.
It also includes free roaming in 18 countries including USA , UK and Australia.
You can Order a free SIM here at the Lycamobile site

48Months For €15 a month  you can get 15Gb of data a month plus 50 mins of calls to mobiles and 100 texts.
For €20 you get 8Gb of data , unlimited calls and  texts to mobiles. With 48 Months  you can only use what your sign up for  – there is no credit that can be accidentally used up by data downloads. (which is a good thing) . It’s aimed at 18 to 22 year olds – but no formal checks are made. You can Order a Free Sim here at the 48 Months Website

Meteor : For a €15 monthly top up you get 15Gb of data  plus either unlimited texts or unlimited calls to all network.

The latest addition to the Irish mobile market is IdMobile. You can get 30Gb of data a month on their prepay option  for €15 . You only get  300 any network minutes but you keep your €15 credit. (But with calls and texts costing 35c /min and texts costing 15c each – that €15 will soon run out.)

Tesco Mobile     have a pay as you go option of paying €15 to get unlimited calls – then you can spend  the €15 credit on 10Gb of data

Three Ireland are offering  a   pre-pay deal with  “all you can eat ” data per month  when you top up by €20 a month. (There is a 15GB fair usage limit).  

Vodafone    – you can get 5Gb of data  and free Vodafone calls and texts for €10  if you top up by €20 amonth

Figures checked  June 2016

See more here about which network has the cheapest pay as you go deals for calls and texts.

While you are connected  using WiFi at home or in a pub/restaurant etc – any of that data usage will not be charged to your top up credit – so use WiFi whenever possible.  If you are worried about your credit being eaten up by data  downloads – it is is a good idea to turn off  mobile data on your smartphone.