Working couples 'on their own' as budget leaves them worse off

A couple, with children, earning €45k each, is worse off by €75 according to analysis by Grant Thornton

Wed, 08 Oct, 2025 - 01:00

Paul Hosford, Louise Burne, Tadgh McNally

Working couples have been left worse off by a budget that has been slammed for giving lots to developers but little to ordinary taxpayers.

While there were no major tax increases, the lack of the one-off measures seen in recent years means that a couple, with children, earning €45,000 each is worse off by €75 according to an analysis by Grant Thornton.

Budget 2026, which features Vat cuts for hospitality businesses and apartment developers, was roundly criticised as a "budget for burger barons and big builders”, a "Big Mac budget", and a budget which told people "they are on their own".

Finance minister Paschal Donohoe and public expenditure minister Jack Chambers both defended the Budget, each saying "choices" had to be made and that this was about protecting jobs and investments in the face of global economic uncertainty.

"We have a lot of international risk facing Ireland. That's why we've prioritised investment and protecting jobs," Mr Chambers said.

There are choices and trade-offs that we have to make, we're moderating overall expenditure and ultimately it was about protecting jobs, strengthening our enterprise economy and improving living standards by investing in public services.

Mr Donohoe said the "most important thing" that any worker can be given by the Government is "to look after their job and give them a growing economy". He said there would be a €19bn investment in infrastructure and competitiveness measures next year.

The measures announced on Tuesday include:

A €10 increase to all core social welfare rates and a double Christmas bonus payment;
The minimum wage to increase by 65c to €14.15;
The 2% rate band for USC to rise by €1,318 to €28,700;
The price of a box of 20 cigarettes to rise by 50c;
A cut to VAT for food and catering businesses and hairdressing services from 13.5% to 9% from July 1, 2026;
A new derelict property tax to replace derelict site levy which will be charged at a rate of 7% on the market value of the property;
A cut to the VAT rate for completed apartments from 13.5% to 9%;
A €500 reduction in the student contribution fee for third-level students;
A €4.7bn transport budget which will fund the M28 Cork to Ringaskiddy road and Adare bypass among other projects;
A major redevelopment project at the Crawford Art Gallery in Cork.

While the Government touted the budget as a future-proofing and necessary one, the opposition slammed its use of hundreds of millions of euro in a tax package which will see hospitality businesses including fast food giants benefit — though Mr Donohoe said they account for less than 1% of businesses in the industry.

It also criticised a Vat cut for developers of apartments, which kicked in at midnight on Tuesday and covers apartments which are already being built.

Sinn Féin's Pearse Doherty said: "If you are a big corporate landlord, a wealthy property developer, or one of the bailed-out banks, this budget is a mighty sweet package for you.

Labour's Conor Sheehan said the Government was choosing to forgo €390m annually for a "no-strings" cut to Vat.

The opposition also hit out at the Government for the lack of a tax package of workers. According to Grant Thornton Ireland international tax partner Sarah Meredith, since tax credits and bands are not tracking inflation "in reality the majority of working people will see an increase in their personal tax burden".

"Our calculations show that, in last year’s budget, excluding child benefit, a married couple with two children earning €45,000 each, was €1,850 better off. This year that same couple is €75 worse off per annum.”

Budget Families

What the changes mean for you and your family

Compiled by Deloitte