Budget 2017: First-time buyers and pensioners set to benefit

Parents of young children, first time buyers of new houses and pensioners are expected to be the major beneficiaries of next week’s budget.

Minister for Public Expenditure and Reform Paschal Donohoe will finalise spending proposals with his cabinet colleagues in the coming days, but Government sources said yesterday the outline is becoming clear.

After a series of meetings in recent days, it appears that agreement is close on a childcare package worth in the region of €100 million.

The subsidised childcare package devised by Minister for Children Katherine Zappone was initially targeted at people on low incomes.

However, after representation from Fine Gael TDs, there have been discussions about widening the scope to bring in families with incomes up to €55,000.

It is understood that Independent Alliance Ministers have backed the Fine Gael position that middle income earners should be catered for in the new child care subsidies.

The issue was discussed at a meeting between Minister for Finance Michael Noonan, Mr Donohoe and the Independent Alliance Ministers last Thursday, which was chaired by Taoiseach Enda Kenny.

Independent Alliance Ministers also pressed for a €5 increase in the State pension as part of a package of measures to benefit the elderly.

Pensions

Fianna Fáil also pressed for a €5 increase in the pension and a rise of around that figure is now expected to feature.

The Independent Alliance is also seeking a number of measures aimed at improving conditions in rural Ireland.

Measures to deal with the housing crisis, particularly the difficulties faced by first time buyers, will be another important feature of the budget. The scheme will introduce an income tax rebate aimed at enabling first time buyers to accumulate cash to cover a deposit.

The tax refund, which will be in the range of €5,000 to €15,000 will be linked to the price of a home rather than earnings and will apply to single people as well as couples.

The Government’s intention is to limit the scheme to new houses in order to encourage new building, but Fianna Fáil is pressing for the scheme to be applied to all home purchases by first time buyers.

The monthly exchequer returns, due to be published tomorrow, are expected to show continued growth in tax revenue with spending under control in all Departments.