Budget 2023

Budget 2023 was due to be announced on Tuesday, October 11th 2022 – but it has been brought forward to Tuesday September 27th 2022 , two weeks earlier than expected.

A major focus of Budget 2023 will be to help people with the increases in the cost-of-living.
Average inflation in Ireland is expected to be 7.1 per cent in 2022 before easing back to
4.0 per cent in 2023.

Food and energy prices in Ireland have risen rapidly over the past year, reaching a high point of 23.8 per cent per annum in May 2022. While the increase in non-food and energy-related goods has been more
gradual, As of May 2022, prices of these items had increased 5.1 per cent in a year.
ESRI figures show that food and energy items account for just one-fifth of household consumption.


The government have confirmed that they have more funds available for Budget 2023 than they have had in recent years. This is driven by the fact that tax receipts are very healthy and there are record levels of employment.

It is understood that the 2023 Budget package will be €6.7 billion, which is €2.2 billion greater than originally planned.

Around €1 billion of this will be in tax changes, which is twice the amount originally set out.


Energy Prices

The current fuel excise tax cuts and the reduced Vat rate for electricity, are expected to be extended as part of a budget 2032 package.

There may also be another €200 credit on electricity bills.


An increase to the Fuel Allowance is also expected or at least an extra one off lump sum this year.


Childcare

Sources in the Department of Children have said that increases to childcare subsidies in Budget 2023 will be “significant” and would represent a key plank of October’s budget.



Social Welfare

The social welfare package in Budget 2022 saw 1.4 million people receive a €5-per-week increase in payments and it looks like Budget 2023 could see even higher increases.


Leo Varadkar has said already that increases in the State pension and other social welfare payments will be greater in 2023 than they were in 2022
The SVP has asked for weekly core benefit increases of €20 – but a €10 or €15 weekly increase is probably more likely.

Consideration is also given to increasing welfare rates in line with the Harmonised Index of Consumer Prices (HICP). Based on the index rate from May 2022 – this would mean an 8.3pc increase in payments or €21.10 extra per week

There is also the possibility of a one-off Autumn “bonus” payment for all welfare and state pension recipients. This will probably be in the form of a double week, similar to the Christmas Bonus.



The regular Christmas Bonus for pensioners and welfare recipients is also expected to be confirmed as 100% again in 2023.
Double payment of the children’s allowance payment is also being considered for December 2022.

Ukraine Refugees

As of 7 June 2022, nearly 33,000 Ukrainian refugees have arrived in Ireland.
Providing for the humanitarian needs of Ukrainian refugees arriving in Ireland will require substantial resources. In the Stability Programme Update, published in April, contingency funding of €3 billion was indicated for 2023 to meet these costs. Budget 2023 will provide confirmation of these figures.

Taxation

The government has already promised to index the income tax bands and tax credits against inflation – so we expect the tax reduction package to be bigger in Budget 2023 than it was in previous years. It is likely that about €1 Billion will be put towards tax reductions.

New 30% Tax Rate

Leo Varadkar said in August that a new 30% tax rate for middle-income workers is under consideration, but he warned that no measures have been decided on yet. This is looking like it won’t happen this year. A

One possible option is that taxpayers would pay a rate of 30% at the point where they now enter the top 40% rate at €36,800 up to €41,800. This would benefit a single taxpayer by approximately €10 a week and would help about 35% of taxpayers.

Another potential option would be to expand the new 30% rate up to incomes of €46,800. This would benefit a single taxpayer by approximately €19 a week.

Tax-Free Bonuses for employees:


There is a proposal to increase the tax-free bonus amount an employer can give an employee from €500 to €1,000 annually. This may be confirmed as part of Budget 2023.

Tax relief for Landlords and Renters

Leo Varadkar mentioned in August that the upcoming Budget might include measures to help stop the exit of landlords from the rental sector. This could be in the form of tax relief and would also come with tax relief for renters.


Education

There will be increases in the back-to-school allowance and also the grants for third level education .

Third level fees may also be reduced by at least €250 a year.


Health

Labour health spokesperson Duncan Smith has suggested that the removal of all in-patient hospital changes and parking charges for all public patients should be included in Budget 2023.