On Tuesday, 27th September 2023, Ministers Pascal Donohue and Michael McGrath delivered the Budget 2023 – coined the ‘Cost of Living’ Budget.
The €11 billion budget included a one-off cost of living package worth €4.1 billion, benefiting a number of sections of society including social welfare recipients, third-level students and renters.
Budget 2023 Highlights
Here we compiled the main provisions announced for near year under Budget 2023:
A significant reduction in the fees by third-level students was announced, with a reduction of €1,000 announced with immediate effect – a welcome announcement to parents of college students.
In addition families earning under €100,000 will receive a further permanent €500 reduction. Families earning under €62,000 p/a will also not pay college registration fees of more than €1,500.
Recipients of the SUSI grant are to receive a double payment before Christmas, and PHD students are also set to be given a once-off cost of living payment as part of Budget 2023.
Primary school students are to now get their schoolbooks for free from next September, and approximately €10 million was put into the school bus scheme.
In-patient fees in hospitals have been ceased. The free GP visit card has been extended to an additional 430,000 people – meaning half the population will have either a free GP visit card or medical card.
Budget 2023 has seen a publically funded IVF treatment model also announced, due to begin next year with the support of a multi-million euro fund. The age range for the Free Contraception Scheme for women has been extended from 25 and under, to those aged 30 and under.
The long-anticipated decision was made regarding the Help to Buy Scheme which saw it being extended for an additional two years until the end of 2024, granting first-time buyers up to €30,000 in tax rebate.
Another significant commitment was made in the form of a tax credit for renters, whereby taxpayers who rent will receive €1,000, split into two credits – one applying this year and the second applying next year.
Two other notable announcements included the introduction of a Vacant Property Tax for homes that have been occupied for less than thirty days in a twelve-month period, and Penal Tax for Concrete Products.
Households & Personal Finance
In combating the rising cost of energy, a €600 electricity credit was announced in Budget 2023 for households which will be paid over three bills. Childcare fees are also to be cut by 25%.
As well as a minimum wage increase to €11.30 per hour, the threshold for the top tax rate has been increased to €40,000 – meaning that a single person would make a tax saving of more than €600.
The personal tax credit is to rise to €1,775 from €1,700, with the same increase due for the employee tax credit and the earned income tax credit. The 2% USC rate band is to increase from €21,295 to €22,920.
Under a new Temporary Business Energy Support Scheme (TBESS), businesses are to receive up to €10,000 a month to help with energy bills. This is estimated to cover 40% of the increase in electricity or gas bills.
Budget 2023 announced the hospitality and tourism sector’s 9% VAT rate for certain activities is due to continue until the 28th February 2023. The annual limit on vouchers that employers can give their staff will rise from €500 to €1,000. Additionally, two vouchers may be given under the exemption in this tax year.
The universal weekly welfare rates are to increase by €12 from January 2023, at a cost close to €1 billion next year, with increases kicking in from the beginning of 2023. A double payment will be granted under the cost of living package in the coming weeks, with another scheduled for Christmas.
In an effort to incentivise saving hay and fodder, a Fodder Support Scheme will pay farmers up to €1,000 for doing so in 2023. and a €8 million graint aid scheme will be introduced to support the spreading of lime.
A scheme for beef farmers will replace the €28 million beef environmental efficiency programme for sucklers. A similar level of funding is believed to be allocated for this scheme.
In incentivising the increase in tillage crops to reduce the dependency on imported feed material, a €10 million tillage incentive scheme support measure was announced.
A number of farming-related tax reliefs are to be extended, subject to agreement with the EU, such as enhanced stock relief, stamp duty for young-trained farmers, farm restructuring CGT relief and more.
For the construction of modern slurry storage facilities, accelerated capital allowances are to be granted.