Budget 2024: Bonus welfare payments, €10k business boost, mortgage relief and more

Workers will be boosted by 0.5% cut in the USC rate, which will come down to 4%.

Michael McGrath and Paschal Donohoe unveil the Government's Budget for 2023 on September 27, 2022. Picture: Damien Storan/PA Wire

Small and medium-sized businesses will receive a lump sum payment of up to €10,000 as part of Tuesday's budget which aims to give something to everyone.

Families, pensioners, workers, mortgage holders, and the self-employed will all receive a boost through a combination of tax cuts, increased supports, and once-off payments.

Workers will now hit the higher rate of income tax at €42,000 and will be boosted by 0.5% cut in the USC rate, which will come down to 4%.

The 2% USC band ceiling will also increase by €2,840 to €25,760, and the earned income tax credit will jump by €100 to €1,875.

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Parents will get money back in their pockets through a 25% reduction in childcare costs following an initial cut of 25% last year.

This has been seen as a major win for Children's Minister Roderic O'Gorman, however, given the cost of this support, it is likely that the cut in creche fees will not be rolled out until September.

Struggling mortgage holders will also be assisted through a targeted interest relief, which will see up to 165,000 households on variable and tracker mortgages benefit by up to €1,250. The measure will be time-limited and likely to be just for 2024.

Among the measures to be announced by Finance Minister Michael McGrath and Public Expenditure Minister Paschal Donohoe are:

• €12 per week increase in all social welfare payments from January;
• €400 lump sum payment to people in receipt of carer's allowance, disability allowance and fuel allowance;
• A double child benefit payment;
• Free schoolbooks extended to secondary school pupils in Junior Cycle;
• The hot meals programme extended to 900 schools;
• Families with an income of less than €100,000 will have college fees for undergraduate students halved to €1,500;
• Third-level grants to increase by €300;
• Funding to provide for the first Garda Reserve recruitment campaign since 2017;
• A 50% public transport fare cut for young people will be extended to 25-year-olds.

At least 130,000 businesses, including creches, local shops, and hairdressers, will benefit from once-off financial supports hammered out as part of final discussions that continued into Monday evening.

The €250m pot will target what has been described as "Main St businesses", with companies getting up to 50% of their rates paid by the State. This could see businesses receive up to €10,000.

Enterprise Minister Simon Coveney was adamant that the payment be as simple as possible, as it has been acknowledged that the previous TBSS scheme was "cumbersome".

Infrastructure fund

Mr McGrath, who is the first Fianna Fáil minister to hold the Finance portfolio since 2011, will also set aside a tranche of income taken in from corporation taxes in a newly-established long-term fund.

Before announcing Budget 2024 in the Dáil, Mr McGrath will bring a bill to Cabinet to sign off on the new multi-billion infrastructure fund, which is designed to "protect for the future". It is expected that around €15bn will be deposited into the fund in the first year.

Renters and landlords

Meanwhile, renters will see the €500 tax credit introduced last year increase to €750.

Landlords will be given a "modest" tax break, sources said, with income of €3,000 taxed at 20% in 2024, increasing to €4,000 in 2025 and €5,000 in 2026 and 2027. The measure was expected to cost up to €48m in 2024.

However, after difficult discussions with Health Minister Stephen Donnelly due to a €1.1bn overspend at his department, it is expected there will be no new initiatives announced, with doubt cast over the expansion of free contraception to those aged 30 and over.

Cost-of-living

Nine lump sum cost of living payments totalling over €1.2 billion will also be provided which will focus on helping families and households through winter months.

The bonus payments are:

• Double lump sum Child Benefit: €280 
• Christmas Bonus 
• January Bonus 
• €200 on Living Alone Allowance 
• €400 Carers Support Grant
• €400 Disability Support Grant 
• €400 working family payment 
• €300 Fuel Allowance payment 
• €100 Qualified Child Bonus

The key features of today's Budget have been "well flagged", the Public Expenditure Minister says.

Arriving for a Cabinet meeting to sign off on the Budget, Paschal Donohoe denied that today's announcement will be "conservative".

He said that USC cuts and tax changes brought forward by Finance Minister Michael McGrath were "well balanced". However, Mr Donohoe did accept that this year's budget would differ from that announced last year.

"Any budget that contains this amount of spending could hardly be described as conservative. But it is a different budget to what we delivered a year ago. The amount of growth in day to day public spending is at a lower pace than last year and the one off measures that we have brought forward have been changed to reflect the fact that while inflation is still present, it is growing at a slower pace.

"So the budget is of a different scale, but it is by historical standards a large budget."