Social welfare, tax changes, and childcare costs: Everything we know about the budget so far 

People set to benefit from tax band changes, cuts to childcare costs, and reduced college fees, writes Political Correspondent Louise Burne

The Coalition, and in particular Fine Gael leader Harris, has vowed that Budget 2027 will be one for people who “get up early in the morning”.

After weeks of negotiations, nitpicking, and number crunching, the unveiling of Budget 2027 is now just hours away.

Tánaiste and finance minister Simon Harris and public expenditure minister Jack Chambers will take to their feet in the Dáil from 1pm on Tuesday to explain the Government’s funding plans to the nation. Ahead of the formal announcement, here is what we know so far.

Tax

The Coalition, and in particular Fine Gael leader Harris, has vowed that Budget 2027 will be one for people who “get up early in the morning”.

Last year’s budget did not do anything to alter tax bands or credits, with much of the tax package going towards a Vat cut for the hospitality sector.

While negotiations were continuing last night, it is largely expected that the entry rate for the higher 40% rate of tax will rise from €44,000 to €46,000. This would lead to people saving €400 a year (€33 a month). However, it is expected there would be wriggle room for the threshold to rise higher. With changes to tax credits also expected, it is likely workers earning over €46,000 will pay at least €500 less in tax a year.

There is also expected to be “modest changes” to each of the inheritance tax band thresholds.

Childcare

The Irish Examiner understands that, while negotiations are still ongoing, “good progress was made” on childcare costs as part of the leaders’ meeting in Government Buildings yesterday.

It is expected that there will be an increase to the National Childcare Scheme, with emphasis on children aged under five in early years education, as well as junior and senior infants who require more hours in childcare than older children.

It is hoped that parents will save at least €1,000 over the course of the year in fees for children in this cohort, with negotiations expected to continue today to determine the exact fees and savings.

The change will take effect from next September, to allow the systems to work out how to differentiate between age groups. Sources told the Irish Examiner that the highest costs are borne by parents with younger children, and this is why the Government decided to target this group.

There should, however, be some cuts to childcare costs for parents with older children, as the maximum fees chargeable by providers is expected to be cut.

There will also be funding for another wage increase for early years educators, it is understood.

Energy

Energy is one of the hottest topics among the electorate, with rising petrol, diesel, and home heating prices skyrocketing due to the conflicts in the Middle East.

The excise duty cuts will continue for the rest of the year, with the timeline to reverse the 27c cut on petrol and 32c cut on diesel now “kicked well into the new year”, with changes not expected to take effect until at least February.

At the Fianna Fáil Cairde Fáil gala dinner on Saturday evening, Taoiseach Micheál Martin effectively confirmed that the Government was leaning towards postponing any carbon taxes on kerosene for the lifetime of this Coalition. 

This would ensure the cost of home heating oil would not rise as a result of carbon tax increases.

College fees

As revealed today by the Irish Examiner, parents with more than one child in college will see cuts to their college fees.

Higher education minister James Lawless will announce tomorrow that families with more than one child in higher education will receive a €750 discount in fees for each student.

Families with incomes of between €120,000 and €150,000 will also qualify for a new €500 per student grant.

Families currently receiving grants covering 50% of the €2,500 student contribution fee will see their grants rise to 75% when they have more than one child in college. This will reduce their fees to €625 per student.

SUSI maintenance grants, which are paid towards students’ living costs, will increase by 4.5%, with some students set to receive up to €357 extra per year, depending on their eligibility.

The student contribution fee will remain at €2,500, despite a last-minute attempt yesterday to reduce fees by €250.

Social welfare

While the social protection budget is usually one of the last ones to be decided, minister Dara Calleary’s budget has been taking shape over recent days.

The much-awaited cost of disability payment will be delivered as one €500 lump sum rather than a monthly payment. While there is acceptance in Government that some may be unhappy about the fact that it isn’t a monthly payment, there is also acknowledgement that there are contrasting views in the disability sector about how the payment should be delivered.

Pension, unemployment benefits, and other social welfare rates will increase by €10 a week.

The fuel allowance will increase by €5 a week. It is understood that either a weekly change or a lump sum was being explored but it was feared that a lump sum would be swallowed up quickly.

The Taoiseach also confirmed that there will be a double payment at Christmas for social welfare recipients.

Sport and culture

As reported by the Irish Examiner last week, minister Patrick O’Donovan left a meeting with Mr Chambers after less than nine minutes following a disagreement about this department’s budget package.

The budget was settled on Saturday morning but is understood to be small. There will be a minimal increase to sports funding, with a small uplift that will ensure hurling and camogie academies are funded but “not much else”.

While it had been suggested that funding had been secured to “develop” a “culture card”, which would give €100 to 16-year-olds to spend on cultural events, the Irish Examiner understands that there is no concrete funding assigned to this.

One senior Government source remarked that, while it can be examined, the Department of Public Expenditure does not typically fund the examination of proposals.

Another source described the culture card as “dead as a dodo”.

Justice

Funding for 1,000 new gardaí has been secured as part of justice minister Jim O’Callaghan’s budget negotiations.

Additional money has also been secured for the International Protection Office to fund more staff and further deportation flights, as well as for youth diversion measures.

There will also be further money allocated to build additional safe housing for victims of domestic, sexual, and gender-based violence.