A round-up of the impact Minister Cowen's budget may have

Single worker

Elaine is 30, single and lives in Dublin. She works in the public sector and earns an annual salary of €48,000.

Elaine owns a three-bed house in Dublin. She lets two of the rooms in her home to friends for a total of €630 per month. She avails of the rent-a-room relief and therefore does not have to pay income tax on the rental income.

She has recently bought a new apartment which qualifies for urban renewal relief. She hopes to rent this out shortly.

Elaine is relieved that the favourable relief in respect of her new property remains in place, although this is being abolished for similar new properties.

Elaine intends to buy a new car and is disappointed that the Vehicle Registration Tax remains unchanged. As she drinks wine, she is glad that the price of wine has not been increased in the Budget.

Single-income couple

Tom and Joan are a single-income couple living in Dublin. Tom earns €72,000 per year as a sales rep and Joan remains at home to care for their two children.

Tom has the use of a company car worth €28,000. His annual business mileage is 24,000. While they acknowledge that the standard rate band for single-income couples has been increased, the saving is diluted by the increase in the employee PRSI ceiling, with the effect that their additional net cash is just €68 per month.

Dual-income couple

Pat and Geraldine are in their 30s and live in Limerick with their two young children.

Pat works in the IT sector and earns an annual salary of €46,000.

He makes pension/AVC contributions of €320 a month.

Pat's employer pays his annual health insurance and his gym subscription.

The total annual value of his benefits is €1,800.

Geraldine job shares and earns €22,000.

As the creche is costing €1,000 per month, Geraldine is considering giving up her job to remain at home.

Pat and Geraldine drink beer and spirits and are relieved that the price of these has not been increased.

They had hoped the Minister would increase the standard rate band sufficiently to take them out of the high tax bracket but unfortunately this has not happened.

While the additional income they will receive from the introduction of the Early Childcare Supplement (€1,000 per annum per child under six years of age) will go some way to meet their childcare costs, they are disappointed that they do not receive a tax credit for the amount of childcare paid by them.

High-income couple

Philip and Edel are in their early 50s and live in the Dublin suburbs.

Philip changed job last year and now has an annual salary of €150,000.

Philip was not part of the pension scheme in his previous job and so currently maximises his personal pension contributions to the 30 per cent limit.

Edel works part-time as a receptionist and earns €18,000.

Edel's elderly mother lives in a nursing home. Philip and Edel pay €21,000 towards the cost of this, of which €18,000 qualifies for tax relief.

They claim the dependant relative tax credit and the qualifying medical expenses for the nursing home.

Philip and Edel are both relieved that the tax relief they can receive on this expense remains at 42 per cent.

However, they are somewhat disappointed with the increases in the personal tax credits and the standard tax rate band for married couples, which results in a tax saving of just €86 per month for them.

Philip has an Special Savings Incentive Account (SSIA) which is due to mature in July 2006.

He is uneasy that the Minister did not mention the introduction of some form of tax relief should he transfer the funds from his SSIA to a pension plan.

Pensioners

Bobby and Mary are retired, in their 70s and living in Galway. Bobby has an occupational pension of €27,000 and receives dividends of €8,000 a year. Mary is in receipt of an occupational pension of €9,000 a year.

Bobby and Mary are thinking of visiting their daughter in Australia and Bobby may sell some of his shares to fund this trip. They are relieved that the capital gains tax rate remains at 20 per cent.

As both Bobby and Mary receive the old-age contributory pension - Bobby at full rate and Mary at reduced rate - they are pleased to see that the rates have increased again this year.

They are, however, disappointed that despite the increase in the standard rate band, they will still pay tax at the higher rate.

Nonetheless, they are pleased that they will be better off by €171 a month.

Cohabiting couple

Patrick and Fiona are not married and have been living together for the past 15 years.

They jointly own their family home in Dublin. A number of years ago Patrick inherited a house from his mother. This is now let to a young family.

Patrick is a store manager. His annual salary and rental profit amount to €85,000 a year. Fiona stays at home to look after their two children.

They are disappointed that for income tax purposes they will still be treated as single people, which they believe is unfair as it generates a higher tax liability for them, compared to a married couple in similar circumstances.

They had also hoped for a reduction in income tax rates, which has not materialised.

They are still hugely concerned about the amount of Capital Acquisitions Tax that would be payable if Patrick were to die and pass his rental property to Fiona.

The Budget will give them just €63 extra net cash a month in 2006.

Low-income couple

Simon and Catherine live in Gorey, Co Wexford, with their daughter. Simon works in a local factory and earns €35,000 a year, while Catherine remains at home to care for their daughter.

They currently rent the family home. As they are struggling to make ends meet, they are pleased that the Minister has reduced the tax burden of low earners.

However, the increase in tax credits for 2006 is not sufficient to take them outside the tax net. They are better off by just €31 per month.

As the Minister is introducing an exemption from income tax for people minding children in their home - where the annual income does not exceed €10,000 - Catherine is considering supplementing her income by minding her friend's two children in her home.

They are also pleased that the Minister has recognised the additional cost of having young children, with the early childcare supplement, which will give them €1,000 per annum from mid-2006.