The Minister for Finance and Minister for Public Expenditure and Reform have today announced details of Budget 2024 with a €14 billion package being delivered against a ‘backdrop of uncertainty’ and ongoing cost of living increases.
A summary of the main changes are as follows:
A tax package worth around €800 to individual workers. The level at which earners begin to pay the higher rate of income tax will go up by €2,000 to €42,000.
An increase in the Personal, Employee & Earned Income Tax Credit from €1,775 to €1,875.
An increase of €100 in the Home Carer, Single Person Child Carer & Incapacitated Child Tax Credit.
€12 increase per week in main welfare payments and State pension.
USC will be cut from 4.5% to 4%, the first reduction in USC rates in five years.
PRSI contribution rates will increase 0.1% from 1 October next year.
Retirement Relief - From 1 January 2025, the higher level of relief, which applies on disposals to children and to others, will be available for disposals occurring from the age of 55 until the age of 70. Also from 1 January 2025, there will be a new limit of €10 million on the relief available for disposals to a child up until the age of 70.
A once-off mortgage-interest-relief measure which will give 20% tax relief on the increased amount of interest paid in 2022 compared to the calendar year 2023, capped at €1,250 per property.
The rental tax credit is to be increased from €500 to €750.
Landlords will benefit from a tax break worth between €600 and €1,000, rising every year they stay in the market up to 2027.
Minimum wage to rise by €1.40 to €12.70.
Pension changes
There were no changes in relation to private pensions in Budget 2024, although we expect some small pension changes to be included in the Finance Bill 2023 which is due to be published later this month.
Social Welfare Pensions
Budget 2024 confirmed that the State Pension (Contributory) Personal Rate will increase by €12 per week from €265.30 per week to €277.30 per week from January 2024.
Cost of Living "One Off" Support Payments
This year the Cost of Living Support payments will be as follows:
Energy credit of €450 across three instalments of €150 between the end of this year and next April
Double child benefit
Christmas bonus of social welfare payments
Once-off double payment of all social welfare payments in January
€400 lump sum to recipients of the working family payment
Those on the Living Alone Allowance will receive an extra €200 payment
Once-off payment of €400 to be made before Christmas to recipients of Carer's Support Grant, Disability Allowance, Blind Pension, Invalidity Pension and Domiciliary Care Allowance.
Income Tax
There was an increase of €2,000 in the income tax standard rate band for all earners, from €40,000 to €42,000 for single individuals and from €49,000 to €51,000 for married couples/civil partners with one earner and increase up to €33,000 (from €31,000) for two earners.
There was also an increase each of the Personal Tax Credit, Employee PAYE Tax Credit and Earned Income Credit by €100, from €1,775 to €1,875 and an increase of €100 in the Home Carer Tax Credit from €1,700 to €1,800 and an increase of €200 in the Incapacitated Child Tax Credit (from €3,300 to €3,500).
Universal Social Charge (USC)
The USC Rates & Bands from 1 January 2024 will be:
Incomes of up to €13,000 are exempt. Otherwise:
€0 – €12,012 @ 0.5%
€12,013 – €25,760 @ 2% (there was an increase of €2,840 to the ceiling for the 2% rate band)
€25,761 – €70,044 @ 4.0% (the rate is to reduce from 4.5% to 4%)
€70,045+ @ 8%
Self-employed income over €100,000 = 3% surcharge
The USC concession for medical card holders is being extended for a further two years to 31 December 2025. Reduced rates of USC apply to individuals who have a full medical card and whose income is €60,000 or less per annum. The reduced rates of USC are 0.5% on the first €12,012 and 2% on the balance.
PRSI
Pay Related Social Insurance (PRSI) contribution rates will increase 0.1% from 1 October 2024.
Savings: Corporate Deposits
The current corporate exit tax rate remains at 25%, in line with corporation tax for non-trading income.
Capital Acquisition Tax (CAT)
There was NO increase in any of the CAT Thresholds and these remain as follows:
The Group A Threshold (gifts or inheritance from parent) remains unchanged at €335,000.
The Group B Threshold (gifts or inheritance from brother/sister/aunt/uncle/grandparent/foster child) remains unchanged at €32,500.
The Group C Threshold (relationship other than A or B) remains unchanged at €16,250.
The rate of Capital Acquisition Tax remains at 33%.
Capital Gains Tax (CGT)
Capital Gains Tax rate remains at 33%.
