Budget 2021: Here’s a quick list of everything you need to know

By Yay Cork October 13, 2020October 13, 2020

It’s been a tricky week for Finance Minister Paschal Donohoe.

But in the Dáil today, the minister outlined details of Budget 2021, one he believes is the first step in helping to “build a stronger and more resilient Ireland”.

“Yes, the test we face is daunting, further demanding choices await,” he said, in an attempt at an uplifting introduction.

“Yes, the uncertainty and anxiety about the future of lives and livelihoods are great, and yes we will prevail.”

The full package amounts to an “unprecedented” €17.75 billion, with all decisions made on two assumptions; that a coronavirus vaccine will not be available next year and that there will be no bilateral trade deal between the EU and the UK.

Some important information for workers – no increase in income tax, USC or PRSI. You will be entitled to up 5 weeks of paid parental benefit. If you are off sick for any reason, you can claim illness benefit from day 3.
— Leo Varadkar (@LeoVaradkar) October 13, 2020

Highlights including a VAT cut for Ireland’s struggling tourism and hospitality sector and a €5k rebate for businesses forced to close temporarily as a result of Level 3 restrictions.

Apart from that, there was bad news for smokers and good news on the price of a pint – we’ll take the positives where we can get them.

Here’s a handy breakdown:

Social welfare

The Temporary Wage Scheme is set to continue into 2021, with any decisions postponed until more is known about the Covid-19 situation.
Child Benefit to increase by €5 for over 12s and €2 for under 12s.
Living Alone Allowance: This payment will increase from €14 to €19.
The Christmas bonus will be paid anyone receiving the PUP for four months.
The plan to increase the pension age to 67 in January has been scrapped.

Cigarettes

The price of a box of cigarettes will rise by 50c. Smokers will be paying €14 for a pack of 20 cigarettes from midnight tonight.

Alcohol

After one of the toughest years in history for Irish pubs, there will be no tax hike on alcohol this year.

Health

€4 billion has been earmarked for the health service to increase capacity and provide 1,146 acute adult beds
Mental health services will be allocated €38 million.
€20 million will be going to disability services.
€5 million for community-based dementia supports.

Housing

The Help-to-Buy scheme for first-time property buyers is being extended right up until the end of 2021. The relief is available up to a maximum of €30,000.
€5.2bn has been allocated to housing in 2021, including €500m for 9,500 social housing units, €65m to retrofit existing social housing stock and €110m for an affordable housing scheme.
€22m has been earmarked for homelessness services and extra beds.

Families

The Dependent Relative Tax Credit will increase by €70 to €245.
The Parents Benefit will be extended by a further three weeks.

We will invest €5.5m in our Hot School Meals programme, increase parents benefit to five weeks and provide additional supports to working lone parents. 4/5
— Heather Humphreys (@HHumphreysFG) October 13, 2020

Education

€8.9bn allocated to education this year, €2bn of which will be spent on special education, with 900 additional SNAs and 403 extra teachers to be employed.
The pupil: teacher ratio will be brought down from 26:1 to 25:1.

Public services

A total of €8.5 billion has been designated for public services in the face of Covid-19. A €2.1 billion contingency fund is included.
Recovery Fund: €3.4bn has been ringfenced by the Government to stimulate employment

Business

Starting today, rebates of up to €5k a week are to be made available to Irish businesses that were forced to shut their doors during Level 3 Covid-19 restrictions.
VAT: The hospitality and tourism sectors will be given a 12-month VAT cut, bringing it down from 13.5% to 9% starting on November 1st, 2020.
Working from Home: Employees can now claim a tax deduction for broadband costs, as well as other utilities.
The commercial rates waiver has been extended for the rest of 2020.
€10m has been ringfenced for Cork and Shannon airports.
€50m will be allocated to Live Entertainment Supports, with Arts Council Funding increasing to €130m.

Income tax

Income tax bands will remain more or less the same, apart from a slight increase in the second USC rate band ceiling from €20,484 to €20,687.
The weekly threshold for the higher rate of employer’s PRSI will be changed from €394 to €398.

Self-employed

The income tax credit for self-employed workers is to increase from €150 to €1,650.
According to a tweet from the Tánaiste Leo Varadkar, “…if you are in receipt of PUP, you can earn up to €480 per month from casual work and keep your full payment.”

Tourism