Under the radar? What we know about Budget 2020
With the Brexit crisis overshadowing events,today is a budget day like no other. But that doesn’t mean you should ignore the financial changes included in the €2.8bn budget which will have a direct impact on your life regardless of whether they land in the spotlight.
Under finance minister Paschal Donohoe’s Budget 2020 plans, over-70s’ medical card weekly caps will rise by €50 for a single person and €150 for a couple. The minimum wage will rise, but not until March, while other child dental and GP announcements will also be delayed.
New charges on petrol and diesel cars may be introduced, commercial stamp duty will increase by 6-7% and carbon tax will rise by 6%. Despite speculation, the Help to Buy scheme will remain largely unchanged. However, the €900m set aside to cope with Brexit will still cast a shadow over the plans.
Tax
Modest tax cuts will benefit those on the minimum wage. The €13,000 USC entry point will be raised so that a 30 cent rise in the minimum wage to €10.10 an hour is not taken back in tax. This will cost €40m.
But it may be delayed until next year.
A charge on new petrol and diesel cars may also be introduced. Linked to pollution levels, it would add several hundred euro to a purchase.
In a further development, income tax credits for the self-employed will also be aligned to PAYE tax credits. Commercial stamp duty is also expected to increase from 6% to 7%, to help stimulate residential building.
This could net around €94m.
Brexit
The Government is planning to set aside a near-€1bn war chest to help Ireland cope with the prospect of a no-deal Brexit, with some €900m ring-fenced for protecting the country from the crisis.
This is expected to include at least €100m to cope with tens of thousands of people who are set to lose their jobs due to Brexit, and ensuring others keep their employment in a worst-case scenario.
The Government is also changing existing laws to make an extra €10m available for loans to some of Ireland’s smallest companies.
However, the Government’s decision to delay raising the level of the minimum wage until March, to help firms cope with the increased costs if a no-deal Brexit strikes, is expected to split public opinion.
Health
Health Minister Simon Harris is set to increase the over-70s medical card budget by an extra €30m, helping 56,000 people.
This means the gross weekly income threshold for the card will rise by €50 for a single person to €550, and by €150 for a couple to €1,050. Prescription charges for over-70s will be cut by 50c to €1, while the cap on a family’s monthly drugs payment scheme will be reduced by €10, to €114.
Fianna Fáil have also been pushing for more funding for home care services and the NTPF. The Government is also set to announce free dental care for under-sixes and free GP care for under-eights. Both are scheduled for September.
However, the fact the health service is facing a €320-400m budget overrun this year will lead to fresh opposition questions over whether the plans will be implemented.
Welfare
While the Social Protection budget is likely to increase by between €140m and €170m for 2020, the growth in available money is only half of the increase for 2019.
The good news is expected to be that the Christmas bonus of an extra end-of-year week’s payment for social welfare recipients will go ahead this year.
In addition, there will be an increase in the qualified children’s allowance and in the living alone allowance, with these increases helping to protect supports for the youngest and oldest in society.
However, across the board increases for all pension and social welfare recipients have been scrapped. This means that the usual €5 bump is not expected this year.
Climate
Carbon taxes are expected to increase from €20 a tonne to €26. This would mean it would cost an extra €1 or more to fill the tank of a 60-litre diesel car and around €15 for a 900-litre tank of heating oil.
The cost of a 12.5kg bale of briquettes may rise by around 15c. Ministers say increases will help pay for climate action measures and supports for vulnerable households.
A ‘transition’ package for workers exiting carbon-related jobs, such as peat plant workers, may be on the cards. A €6 rise per tonne in carbon taxes would net at least €100m. Expect further rises in the future.
