You can see the fine details of Budget 2016 here – and check how it affects your take home pay and child benefit etc. It is interesting to see though , out of all the hundreds of millions of Euro , where the bulk of the “spare” cash was directed this year.
The biggest “spend” or “giveaway” by far was the €772 million a year in the form of the USC reductions – which will affect around 2.2 million earners. See Details of USC Cuts here.
Another big spend was the extra Christmas Bonus for welfare and pensions. This increase from 25% to 75% will cost about €134 million extra a year. The total bonus payout will be €197 million in 2015. It is paid to 1.23 million people so it works out at an average of €160 per recipient.
The Increased State Pensions (€3 a week) will cost about €93 million extra a year. It means an extra €156 a year for a person on state pension.
Extension of the Early Childhood Care and Education scheme cost – €82 Million
The Child Benefit increases of €5 per month per child will put €72 million back into the economy each year. It works out at €60 a year for each child.
Next on the list of “giveaways” is the new tax credit of €550 for self employed people. This is worth an overall €61 million a year .
(This €61 million is the same figure the government hope to get in each year from the increased tobacco duty!)
At €50 million a year – the half rate of corporation tax on something called the “ Knowledge Development Box” (KDB) is another big portion of Budget 2016 . It is being introduced to try and encourage companies to develop intellectual property in Ireland. A reduced rate of Corporation tax of 6.25% (it is normally 12.5%) will apply to the profits arising to certain intellectual property assets which are the result of “qualifying research and development activity” that is carried out in Ireland.
The decreased motor tax on commercial vehicles is worth €43 million a year to all those haulage companies and lorry and van owners. More Here
The raising of the CAT threshold is estimated to reduce CAT intake by €33 million a year. Details Here
Increase to Respite Care Grant ( Carer’s Support Grant) will result in an extra payout to carers of €30 million a year
A cost of €27 million a year has been put on the Capital Gains Tax relief for entrepreneurs. This will mean a lower CGT rate of 20% will apply to the net chargeable gains arising on disposals of assets comprising the whole or a discrete part of a trade or business. ( subject to a lifetime limit of €1 million on such gains) . (Full CGT rate is 33%)
The PRSI changes in the Budget seemed to have slipped under the radar of most of the media – maybe because no one fully undertands it yet. Here is a summary of the PRSI reductions in Budget 2016 which are worth €17 million a year spread between an estimated 88,000 people earning between €18304 and €22048 . (Average €193 each a year)
Some of the other Budget changes and their total cost:
Increased Fuel Allowance €25 million a year
Syrian Refugee Crisis – resettlement of 4,000 people €20 Million (one off?)
1916 Rising commemoration spending – €18 Million (one off)
Schools – Changes in the staffing schedule in schools to reduce class sizes. €18 Million a year
FIS increases – €18 Million a year
Increases to Jobseeker’s Transitional Payment €8 million a year ( 5,900 recipients in 2016 which averages out at €1355 each)
Paternity Benefit €5 Million a year