Budget 2024: Tax changes, childcare, mortgages and more – everything we know so far

The Coalition party leaders met the two finance Ministers on Sunday afternoon to hammer out the final details of Budget 2024. The final package will be unveiled on Tuesday, and the core package will likely be worth at least €10 billion, although a package of one-off measures to help households with the cost-of-living crisis will add to this. Here is everything we know about Budget 2024 so far.

Budget 2024 main points

Budget 2024 live coverage

Tax

On taxation changes, the Government will spend at least €1.2 billion, which is a small enough envelope once all the demands are totted up. There will be an increase in tax bands and credits, and there will likely be a cut to the universal social charge (USC). Last year, the standard rate tax band rose by €3,200 to €40,000.

‘You couldn’t make it up’: David McWilliams gives his verdict on Budget 2024

---

Inside ‘the weirdest budget ever’: Climate bust-ups, a mortgage surprise and the Stephen Donnelly saga

---

We cannot aspire to EU-style public services and US levels of tax

---

Budget 2024 calculator: How this year’s budget will affect your income

---

A tax package worth around €800 to individual workers will be announced. Personal, PAYE and earned income tax credits will increase by €100 to €1,875, while the Standard Rate Band - that’s the level at which earners begin to pay the higher rate of income tax - will go up by €2,000 to €42,000.

The ceiling for the lower two per cent rate of Universal Social Charge will go up by €2,840, meaning it will apply on earnings up to €25,760, while the higher rate of USC applied to earnings above that level up to €70,044 will come down 0.5 per cent to four per cent.

Childcare

The expectation is there will be a cut in childcare costs of up to 25 per cent.

There is also a push to expand access for disabled children to the Early Childhood Care and Education (ECCE) programme, while another possibility is targeted childcare supports for those in disadvantaged areas. Further funding may also be on the cards to bring more childminders into the National Childcare Scheme so that more parents can avail of subsidies.

Welfare

Increases to welfare payments are a certainty for pensioners, carers, people with disabilities and others. The final amount looks as though it may be the same as last year – so around €12 is the expected increase, although it is understood Minister for Social Protection Heather Humphreys has been pushing for more.

A double child benefit payment will be made by the end of the year, under the current plans. A Christmas bonus for welfare recipients is also on the cards. There are also plans to expand free hot school meals to all primary schools.

Mr O’Gorman has indicated he is prioritising an increase in the foster carers allowance.

There may also be a hike in the additional rate paid to parents in receipt of welfare payments whose children meet certain circumstances.

Housing

Minister for Housing Darragh O’Brien has indicated he wants to see the €500 rent tax credit increased to about €800, while Minister for Higher Education Simon Harris has said he wants to see it doubled to €1,000. A doubling of the credit is viewed as unlikely, as it has a price tag of €200 million and would eat up a lot of the room to manoeuvre in the tax package. Ahead of Tuesday’s announcement, a compromise of €750 appeared to have been reached.

A package for landlords is also on the table. Landlords will benefit from a tax break worth between €600 and €1,000, rising every year they stay in the market up to 2027. In the first year, €3,000 of income will be taxed at the standard 20 per cent rate rather than the higher rate (meaning €600 extra to the landlord), increasing to €4,000 in 2025 (a benefit of €800 in their pocket) and €5,000 for the subsequent two years (translating to the full €1,000).

Cost of living

Expect a multibillion euro package here, with a focus on helping households with energy costs that are still high. Last year, the Government rolled out three €200 energy credits. This year, there will be three energy credits of €150 each. .

Other options on the table include targeted measures such as a lump-sum payment to all households receiving the fuel allowance and families in receipt of the working family payment. A package for workers who have lost their jobs is also on the table, which could see people given welfare payments equivalent to 60 per cent of their salary up to a maximum of €450 a week.

Once off lump sum payments such as the fuel allowance are expected, although they could be worth less than last year. This is in addition to the core fuel allowance payment.

Mortgages

A once-off measure will be targeted at homeowners who have seen their payments increase sharply amid interest rate hikes designed to stave off inflation. It will be for principle private residences only – ie, not rental properties – and there must be an outstanding mortgage balance of between €80,000 and €500,000 on December 31st, 2022.

The scheme will give 20 per cent tax relief on the increased amount of interest paid in 2022 compared to the calendar year 2023, capped at €1,250 per property, with approximately 160,000 people standing to benefit.

Justice

Funding for hundreds of extra gardaí – if not more – is now guaranteed. There will be two main areas of focus for Minister for Justice Helen McEntee: law and order, and funding to tackle domestic violence.

Transport

The 20 per cent cut to public transport fares for adults will be extended for another year.

Education

Last year the Government moved to provide free schoolbooks to primary level children, and Minister for Education Norma Foley has made no secret of the fact she is keen to expand this to secondary schools. An extension of the scheme for junior cycle students in secondary schools has been agreed.

Separately, funding for hundreds of additional mainstream teachers is expected. Minister for Higher Education Simon Harris is understood to have secured significant increases in student grants, beginning from January. The increase is likely to benefit over 50,000 students and will see payments increase by over €300 this academic year. The Minister is also understood to have secured significant increases for grants for postgraduate students.

Environment

Carbon tax will most likely go up from €48.50 to €56 per tonne from October for petrol and diesel, with home heating fuels to follow suit after the cold season next May.

Health

Tensions have been running high in health budget meetings, because the department will run over budget by at least €1.1 billion and this has impacted the Government’s spending plans. Minister for Health Stephen Donnelly has been seeking funding for free contraception for more women, but it is not yet known whether he has secured this. He has also sought funding for the roll-out of 1,500 rapid-build hospital beds, and money for a huge tranche of new consultants given about 600 have now signed up to the new contract.

Fund for the future

Minister for Finance Michael McGrath is expected to outline his plans to establish new funds into which excess corporation tax receipts will be paid. This would pay for capital investment if the economy slows, given capital projects are often the first thing to be cut when money gets tight. Some of it will also be put into a longer-term investment fund, with the interest used to contribute to bills in the years ahead. There will also be a part of the fund which will be dedicated to climate action projects, it is expected. The total fund could be as much as €14 billion.