Budget 2017: Moves to ease families’ living costs

Only one tax hike combined with modest initiatives to ease the everyday cost of living for working families and the most vulnerable were billed as the hallmarks of Budget 2017.

On welfare, five was the magic number, with state pensions, dole for the unemployed, carers’ allowance, and disability supports all up by €5 from March next year.

The cap on prescription charges for over 70s is also being cut by €5 down to €20.

On the unprecedented housing crisis, questions will be asked about the tax rebate initiative and on whose bidding the first-time buyers’ payback was drawn up — the builders or the house hunters?

The scheme gives a 5% income tax refund for those getting the first foot in the market with a house worth up to €400,000 and a cap of €20,000 for houses up to €600,000.

It only applies to new homes, is backdated to July 19 this year and runs until the end of 2019.

Tax cuts are what all workers want to hear. The deeply unpopular income tax levy, the universal social charge, will be cut by 0.5% across the three lower bands, in a move costing €335m.

Those changes are worth about €3-€7 for people earning from €35,000-€70,000.

Alongside that, the threshold for the 2.5% rate is going up to €18,772 in order to keep minimum wage earners out of the higher levels.

Another key plank of Budget 2017 and a relatively small boon for working families is a childcare subsidy.

From September next year, the State will offer universal payments for all youngsters aged six months to three years who are being cared for by a registered childminder, creche or nursery. It will be worth €960 a year.

A means-tested subsidy, based on parental income, will also apply for children between six months and 15 years.

Finance Minister Michael Noonan insisted his plans were all about prudent planning, with Brexit and other unknowns in mind, and a major initiative is a special “Rainy Day” fund.

Despite the economy bouncing back from a historic crash to outperform every other country in the EU, Mr Noonan said the country is facing into new, unknown risks with the impending Brexit.

“We must put in place economic shock absorbers to enable us to deploy resources to reduce or eliminate the impact of future economic shocks,” he said.

Some €1bn will be pumped into it every year to give future governments something to fall back on.

Elsewhere, hotels and restaurants are being supported again with the continued 9% Vat rate, and corporation tax is remaining unchanged at 12.5%.

“Nobody in Europe or anywhere else is asking for it to be changed,” said Mr Noonan.

Ireland also committed to a sugar tax, and in line with the UK it will kick in some time in April 2018.

Smokers again were given no breathing room. Cigarettes will be up 50 cent, cementing Ireland as one of the most expensive places in the world to buy tobacco, legally, at €11 for a packet of the dearest brands.

Drink was untouched, the second year in a row under Mr Noonan’s watch.

Other big ticket items are rises in the thresholds for inheritance tax to be paid to €310,000and a range of tax relief to help Ireland meet its climate change commitments.

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