Budget 2023

The Ministers for Finance and Public Expenditure & Reform, Pascal Donohoe and Michael McGrath presented the Budget speech on Tuesday 27th September 2022. The following changes have been announced and are due to take effect from 1st January 2023, unless otherwise stated.

Taxation

Tax Rates and SRCOPs

There has been no change to tax rates for 2023. The standard rate will remain at 20% and the higher rate at 40%.

The SRCOPs for 2023 have been increased as follows.

SRCOP        2022         2023
Single/Widowed Person or First €36,800 @ 20% First €40,000 @ 20%
Surviving Civil Partner Balance @ 40% Balance @ 40%
Qualifying for the Single Person First €40,800 @ 20% First €44,000 @ 20%
Child Carer Tax Credit Balance @ 40% Balance @ 40%
Married Couple or Civil First €45,800 @ 20% First €49,000 @ 20%
Partnership – One Income Balance @ 40% Balance @ 40%
Married Couple or Civil First €45,800 @ 20% First €49,000 @ 20%
Partnership – Two Incomes Plus an amount equal to the lower income (subject to a maximum of €27,800) Plus an amount equal to the lower income (subject to a maximum of €31,000)
Balance @ 40% Balance @ 40%
Emergency Basis of Tax – SRCOP
Weekly €708 €770
Monthly €3,067 €3,334

Personal Tax Credits

The following changes to tax credits will apply:

Single/ Widowed Person or Surviving Civil Partner Tax Credit

The Single/Widowed Person or Surviving Civil Partner tax credit will be increased by €75 from €1,700 to €1,775.

Married Couple or Civil Partnership Tax Credit

The married couple or civil partner tax credit will be increased by €150 from €3,400 to €3,550.

Employee (PAYE) Tax Credit

The Employee (PAYE) tax credit will be increased by €75 from €1,700 to €1,775.

Earned Income Tax Credit

The Earned Income tax credit will be increased by €75 from €1,700 to €1,775.

Home Carer Tax Credit

The Home Carer tax credit will be increased by €100 from €1,600 to €1,700.

Sea-going Naval Personnel Tax Credit

This tax credit of €1,500 will be extended for 2023.

Universal Social Charge (USC)

There is no change to the USC exemption threshold of €13,000.

There is no change to the rates of USC. The threshold for the 2% rate will be increased by €1,625 from €21,295 to €22,920.

For 2023, USC will apply at the following rates for those earning in excess of €13,000:

Rate Bands Rate
Up to €12,012 0.5%
Next €10,908 2%
Next €47,124 4.5%
Balance 8%

Non PAYE income in excess of €100,000 will continue to be subject to a 3% USC surcharge.

Medical card holders and individuals aged 70 years and over whose aggregate income does not exceed €60,000 will continue to pay a maximum rate of 2% in 2023. 

The rate of 8% USC will continue to apply under the Emergency Basis.

Small Benefit Exemption

The Small Benefit Exemption has been increased from €500 to €1,000, with employers permitted to give employees two vouchers per year, as opposed to one voucher which was permitted to date. This is applicable for 2022 and subsequent years.

Rent Relief

A new €500 rent tax credit will be introduced from 2023 onwards for those renting in the private sector who are not in receipt of other State housing supports. It is proposed that the credit will be doubled in respect of married couples and civil partnerships. In 2023, this tax credit will be available on a retrospective basis in respect of rent paid in 2022.

Special Assignee Relief Programme (SARP)

SARP Relief, which was due to cease at the end of 2022, will be extended until 31st December 2025. However, the qualifying minimum income limit will increase for new entrants from €75,000 to €100,000.

Foreign Earnings Deduction (FED)

FED relief, which was due to cease at the end of 2022, has been extended until 31st  December 2025.

Key Employment Engagement Programme (KEEP)

KEEP has been extended until the end of 2025 and will be amended to facilitate the buy-back of KEEP shares by the issuing company from the employee. The life-time limit on company KEEP shares will be increased from €3 million to €6 million.

Introduction of a Third Rate of Tax

The recent report of the Tax Strategy Group (TSG) examined the impact of introducing an intermediate or third rate of income tax. Minister Donohoe announced that further analysis of this will commence immediately and conclude prior to Summer 2023. Any such change would involve significant changes to both Revenue systems and payroll software and would require significant lead-time to implement, with the possibility that it could be introduced for January 2024.

Compliance

Budget 2023 documentation indicates that Revenue will conduct a range of targeted projects which will include PAYE compliance interventions involving a further focus on share schemes and increased debt management activity.

Film Relief

Film relief, which was due to expire at the end of 2024, will be extended until the end of 2028.

Help to Buy Scheme

The Help to buy scheme, which was due to end in December 2022, has been extended, at current rates, for another 2 years until December 2024.

Pre-letting Expenses of Vacant Residential Property

Landlords are entitled to claim a tax deduction for certain pre-letting expenses of a vacant residential property. The cap on pre-letting expenses will be increased from €5,000 to €10,000, and the qualifying vacancy period will be reduced from 12 months to 6 months.

Vacant Home Tax

A new vacant home tax will be introduced in 2023 and will apply to residential properties which are occupied for less than 30 days in a 12 month period. The tax will be capped at 3 times the existing LPT rates applicable to that property. A number of exemptions will apply to ensure that homeowners are not unfairly charged where the property is vacant for a genuine reason.

Living City Initiative

The Living City Initiative is being extended for a further 5 years until 31st December 2027. In addition, the relief available to owner occupiers is being accelerated so that it may be claimed over 7 years instead of the existing 10 years.

VAT

The second reduced rate VAT rate of 9% will continue to apply to the hospitality sector and to supplies of electricity and gas until the 28th February 2023.

The rate of VAT applicable to the following items will be reduced to 0% in January 2023:

Newspapers and news periodicals, including digital editions

Defibrillators and menstrual products

Non-oral hormone replacement therapy

Non-oral Nicotine replacement therapies

The flat-rate addition scheme which applies to un-registered farmers will decrease from 5.5% to 5.0% for 2023.

Carbon Tax

Carbon tax will increase by €7.50 to €48.50 per tonne. This will apply to auto fuels (e.g. petrol, diesel, etc.) from 12th October 2022 and to all other fuels (e.g. oil, gas, coal, etc.) from 1st May 2023. This has the potential to increase a 60 litre tank of petrol and diesel by €1.28 and €1.48 respectively from 12th October 2022.

However, the increase in carbon tax on petrol and diesel, will be offset by a reduction in the National Oil Reserves Agency levy, which should result in no increase in the price of petrol or diesel at the pumps.

Excise Duty

The excise duty (including VAT) on cigarettes will increase by 50 cents on a packet of 20, with a pro-rata increase on other tobacco products, from midnight on 27th September 2022.

Temporary Business Energy Support Scheme (TBESS)

TBESS will be available to businesses that carry on a trade, are tax compliant and have experienced a significant increase in their natural gas and electricity costs. The scheme will be administered by Revenue and will operate on a self-assessment basis.

The scheme will operate by comparing the average unit price for the relevant bill period in 2022 with the average unit price for the relevant bill period in 2021. Where the increase in the average unit price is more than 50% then the business would be eligible for support under the scheme equal to 40% of the amount of the increase in their electric or gas bill up to a maximum of €10,000 a month and an overall cap will apply on the total amount which a business can claim.

Social Protection 

Social Welfare Payments

All weekly social welfare payments will increase by €12 with effect from January 2023 with a proportionate increase for qualified adult dependants (i.e. State Pension will increase from €253.30 to €265.30; Maternity Benefit, Parent’s Benefit and Paternity Benefit will increase from €250 to €262; while Illness Benefit and Jobseeker’s Benefit will increase from €208 to €220 per week).

The Domiciliary Care Allowance will be increased by €20.50 to €330 from January 2023. It will also be made available to parents of children with severe illness or disability who have to remain in hospital for 6 months after birth.

The Working Family Payment income threshold will increase by €40 from January 2023, regardless of family size. 

The rate payable for a qualified child will be increased from €40 to €42 per week for children under 12, and from €48 to €50 per week for children aged 12 and over, from January 2023.

The Working Family Payment income threshold will increase by €40 from January 2023, regardless of family size. 

From January 2023, the means assessment for the Fuel Allowance will increase from €120 to €200 above the relevant rate of the State Pension Contributory, and a new means disregard for people aged 70 and over of €500 for single people and €1,000 for couples will be introduced.

The earnings disregard for disability allowance and blind pension will be increased from €140 to €165 with effect from January 2023.

A once-off double week “Cost of Living Support” payment will be made in October 2022 to all qualifying social welfare recipients to include pensioners, carers, people on disability payments and jobseekers.

A once-off double week “Cost of Living Support” payment will be made in October 2022 to all qualifying social welfare recipients to include pensioners, carers, people on disability payments and jobseekers.

A Christmas bonus of 100% of an individual’s weekly payment will be paid in December to recipients of long-term social welfare payments.

The following payments will be made in November 2022

Parents in receipt of Child Benefit will receive a double payment (i.e. an additional €140 per child).

A once-off €500 payment will be paid to those in receipt of the Carer’s Support Grant.

A once-off €500 payment will be paid to those in receipt of Disability Allowance, Invalidity Pension, and the Blind Pension.

A once-off €500 payment will be paid to those in receipt of Working Family Payment.

A once-off €400 payment will be paid to those in receipt of Fuel Allowance

A once-off €200 payment will be paid to those in receipt of the Living Alone Allowance (i.e. pensioners and people with a disability getting the Living Alone Increase).

PRSI

While not specifically announced in Budget 2023, the threshold for the higher rate of employer PRSI will be increased to €441 per week (€1,911 per month) in 2023 to ensure that an employer will pay the reduced rate of employer PRSI of 8.8% in respect of an employee working a 39 hour week who is paid the national minimum wage. 

Employment Law 

National Minimum Wage (NMW)

The NMW will increase by 80 cent from €10.50 to €11.30 per hour in respect of hours worked on or after 1st January 2023. The increase in the USC Rate 2 band will ensure that employees working up to 39 hours per week in receipt of the NMW remain outside the top rates of USC, while the increase in the Employer PRSI threshold will ensure employers continue to pay the lower rate of employer PRSI.

Education

Free Schoolbooks for Primary School Children

From September 2023 the state will provide free schoolbooks to all primary school children within the free school system.

Third Level Fees & Grants

The Student Contribution Fee will be reduced on a once-off basis by €1,000 for eligible students in the 2022 – 2023 academic year.

The Student Contribution Fee in 2023 will be reduced by €500 for eligible families earning between €62,000 and €100,000.

Students in receipt of the SUSI maintenance grants will receive a once-off double payment.

The income limit to qualify for a 50% reduction in contribution fees under SUSI will be increased from €55,240 to €62,000 and all SUSI maintenance grants will be increased by between 10 and 14 per cent in September 2023.

The post graduate tuition fee contribution grant will be increased by €1,000. 

Health

GP Visit Card

The age limit for the GP visit card for children will be extended from those under 6 years of age to those under 8 years of age before the end of 2022 and it will be extended to include those on or below the median income in 2023.

In-Patient Hospital Fees

In-Patient public hospital fees (i.e. €80 per day up to a maximum of €800 in a rolling 12 month period) will be abolished in 2023.

Expansion of Free Contraception

Free contraception will be extended to women aged from 16 to 30 years (previously 17 to 25 years) in 2023.

Drug Payment Scheme

The Drug Payment Scheme threshold will remain at €80 in 2023. 

Access to IVF Treatment

Supports will be made available for the first time in 2023 in relation to access to IVF treatment, expanding women’s health hubs and providing additional funding for screening and other women’s health services.

Other

Electricity Credit

Householders will receive a €600 electricity credit which will be applied to bills in 3 instalments of €200, with the first instalment to be made before Christmas with the remaining instalments being paid in early 2023.   

Public Transport

The 20% reduction in public transport fares and the Youth Travel Card discount of 50% which were introduced in 2022 will continue until the end of 2023.

 

Last updated 28/09/2022 – 10.40am

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