Insurance hikes to bite as new year dawns

Health and motor insurance hikes and several budget measures including increases in taxation and funding cuts for the vulnerable come into effect from today.

Most of the major health insurers are forcing customers to pay more for their insurance from their renewal date this year.

Workers will also see smaller pay packets this month with the abolition of the PRSI-free allowance.

Aviva Health will increase the price of six of its plans by between 4% and 30% from today, though it will also reduce the cost of a further three plans.

Laya Healthcare’s prices go up by as much as 13% from today for its 400,000 customers. VHI increased the premiums on 11 plans by 2%-15% from Dec 28.

The increases already introduced, as well as those expected to be imposed in the first few weeks of this year, mean customers could be paying as much as €300 more per year to insure their families than they would have been 12 months ago.

Also from today due to “gender pricing neutral” requirements, which came into effect on Dec 21, motor insurers can no longer distinguish on the basis of gender. That means young female drivers face an average increase of 24% and as much as 36% in the cost of their car insurance.

Motor tax costs also rise today. If the car is registered prior to Jul 2008, the increase is dependent on engine size. There will be a €14 increase for the year from next renewal for a car under 1,000cc. However, for a car over 3,001cc the increase is €126. For cars registered after Jul 2008, the increase is dependent on the vehicle’s emissions with cars with large emissions paying as much as €92 more per year.

There are also increases of up to 2% in vehicle registration tax (VRT), which could be as much as 36% for the most environmentally unfriendly vehicles.

Meanwhile, reductions in social protection spending will see cuts in child benefit and household support packages from today.

While the budget was announced in early December, many of the cuts are only applied from Jan 1.

Monthly child benefit payment — made to 600,000 families — will be reduced by €10 to €130 this month, for the first and second child and by €18 for the third.

Funding for the less-well off through household benefit packages for phone bills and electricity costs will also be reduced this month.

Changes will see more than 1m workers take home less pay. The abolition of the employees’ PRSI-free allowance will reduce pay packets by around €20 this month, regardless of what type of salary workers receive.

The new year also brings in cuts to back-to-education allowances, reduced payment periods for jobseeker benefit claimants as well as a 20% reduction in respite carer grants.

Householders have six months before they have to pay the property tax.

Sky television subscriptions are to rise from Feb 1 and consumers are also facing higher postage prices.