Budget 2017 was announced on October 11th 2016. Here is a summary of what happenend compared to what we forecast.
If you are looking for details of the most recent Budget 2018 which will be announced in October 2017 go HERE.
Check our page giving a more detailed Summary of Budget 2017 Details
USC Reductions: We knew there would be some reductions in USC in Budget 2017 . The FF manifesto said they would aim to abolish USC for earnings under €80,000 but charge 8% USC on income over that. FG said they 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 stated that ” Reductions will be
introduced on a fair basis with an emphasis on low and middle income earners..”
The Dept of Finance recommended increasing the entry threshold for USC from €13,000 to €14,000 .
What happened ? There was a 0.5% cut to the three lower rates of USC so they go down to 5% , 2.5pc and 0.5pc respectively)
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). What Happened – Nothing
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 expected an increase to about €1100 in Budget 2017. What Happened in Budget 2017 – it was increased to €950
DIRT – The Tax Strategy Group has suggested a drop in DIRT from 41% to 40% .
What Happened ? DIRT was cut to 39% with further cuts promised.
Landlords : We expected the percentage of mortgage interest that can be claimed as ane expense by landlords to be increased from 75%.
What Happened ? It was increased to 80% in Budget 2017.
Help to Buy -we knew some sort of help to buy scheme would be introduced in 2017 .
What Happenend ? An income tax refund was introduced in Budget 2017 to assist first time home buyers . It only applies to brand new homes , not second hand ones. Reports say that it will be capped at around €20,000 and will be based on a 5% of the house price.
The Home Carer Tax Credit . 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 suggested it should be increased to just €1100 .
What Happened ? – It was increased by just €100
Capital Acquisitions Tax
The threshold on Band A is was 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). . What Happened ? It was increased to €310,000 in 2017 – with 8% increases on other thresholds.
Cigarettes : We knew there would be higher excise duties on cigarettes.
What Happened ? They were increased by 50c per pack of 20.
Diesel : Duty on diesel was a prime candidate for an increase to bring it closer in line with the duty on Petrol.
What Happened? – No Change
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 .
What Happened? It was announced , but won’t begin until 2018 after consultation.
Welfare and Pensions :
We expected some increases in Budget 2017 to Pensions and some Benefits.following :
What Happened? All pensions and benefits were increased by €5 – but the increases will be from March, not January 2017.
The Christmas Welfare Bonus will be 85% for 2016
The extenion of entitlement to a medical card to all children in receipt of the Domiciliary Care Allowance was well publicised – and did happen in Budget 2017 .
We expected a new “Working Family Payment” to 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.
What Happened? – Nothing.
Help with Childcare Payments
We were expecting a new subsidy scheme for childcare in Budget 2017 – for possible implementation by September 2017.
What Happened ? You can find a detailed outline of the new Childcare subsidy here.
An increase in third level fees and the introduction of a student loan scheme has been a possibility for a few years – and we thought Budget 2017 might see some changes announced in that area.
What Happened ? – Nothing
School Transport – There is an ongoing review of the School Transport scheme and the charges and concessions. We expecedt any changes to be announced in Budget 2017.
What Happened ? – Nothing .
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 we expected it would probably also be announced as part of Budget 2017
What Happened? It wasn’t really announced – but it was mentioned in the documentation.