On Tuesday, Budget 2024 will be delivered by Minister for Finance Michael McGrath and Minister for Public Expenditure Paschal Donohoe.
While some of the finer details are still being hammered out, Irish Examiner Political Correspondent Paul Hosford told Newstalk Breakfast people can expect tax breaks and increases in public spending.
Fine Gael has previously pressed for large cuts to income tax but it is expected there will at least be cuts to the USC.
“You’re looking at a cut to the higher rate, which is the 4.5% rate, that will come down to about 4% and the entry point to the lower rate will be increased,” Mr Hosford said.
“Last year’s changes were probably seen as benefiting higher income workers more than lower income and this is probably a chance to redress that balance a little bit and give a little more to lower income workers.
“The higher income tax rate, the PAYE rate, will go up to about €42,000 - that move is one that Fine Gael has looked at over the last couple of years.”
With inflation expected to average out at 4.9% this year, a number of organisations have called for large increases to social welfare in order to reduce poverty.
“You’re looking at about a €12 increase in core welfare payments for pensioners, for carers, for disability allowance and jobseekers,” Mr Hosford said.
“People have called for that to go higher; some NGOs have called for that to be €30 a week, I don’t think that was ever going to happen.”
Mortgage Interest Relief
Last month, the ECB increased interest rates once again - a decision that has left some homeowners struggling to pay their bills.
Some of those impacted can now expect from benefit mortgage interest relief.
“You’re looking at between a €1,200 and €1,400 tax break for those homeowners affected,” Mr Hosford said.
“It doesn’t look like it’ll [be universal].”
In 2022, student fees were cut and a further reduction could be announced tomorrow.
“That’s one thing that’s still being hammered out,” Mr Hosford said.
“What you can expect is a €300 increase in the academic grant and, for the first time ever, postgraduate students will get grants - it will go up to about €2,300.”
After sanctions on Russia sent the cost of energy soaring, the Government announced €200 would be deducted quarterly from people’s energy bills.
With the price of energy expected to drop in the coming months, the amount available for energy credits is expected to drop as well.
“They won’t be the same level,” Mr Hosford said.
“What we’re looking at is somewhere between €300 and €400 off your bill - probably three payments of €100 but it could be broken down differently.”
Cuts to public transport fares were announced last year and the Green Party is pushing to have further reductions included in Budget 2024.
“This is one thing that Eamon Ryan was looking at really deeply because it’s very, very popular,” Mr Hosford said.
“That was the hope going into Friday, that’s being nailed down today.”
Housing Minister Darragh O’Brien has previously said he expects the Renters Tax Credit will be increased but the exact amount has yet to be announced.
“So, the rental tax credit which was introduced last year at around €500, that will go up to somewhere between €750 and €800,” Mr Hosford said.
“The acknowledgement now is that the average rent is about €780 and Sinn Féin will often say they want to put a month’s rent back in people’s pocket; this is a move by the Government so they can kind of say the same thing.
“If it goes to about €780, they’ll be able to say, ‘We put a month’s rent back in people’s pocket.’”
Parents can expect a double payment of child benefit at some point before Christmas and further reductions in the cost of childcare are planned.
“That’s one thing that’s kind of been played down over the last couple of weeks now,” Mr Hosford said.
“It doesn’t look like it will go that far; there will be a reduction in fees, it won’t hit the 25% [mark previously promised] but it, from Roderic O’Gorman’s point of view, he will argue there’s going to be investment in core allocations for childcare providers.
“It’s going to bring people who use childminders into the National Childcare Scheme, so he’ll be able to sell it as a massive expansion of that scheme but it won’t go to the 25% that a lot of parents were hoping for.”
Main image: Michael McGrath and Paschal Donohoe outside Government Buildings. Image: Sasko Lazarov / RollingNews