BUDGET SUMMARY 2023 28 September 2022

RMcH states:  This document is a short summary of the main changes in taxation, cost of living supports, supports for energy costs, social welfare, health, housing, education, employment and other areas. It is an overview and not a complete statement of all the measures announced in Budget 2023. For a more high-level overview of Budget 2023 please visit https://www.gov.ie/en/publication/4de03-your-guide-to-budget-2023/

Budget 2023

• Introduction
• Social welfare
• Help with energy costs
• Tax
• Employment and business
• Education and training
• Childcare
• Housing
• Health
• Environment and climate
• Transport
• Justice
• Other announcements

Introduction

Budget 2023 was announced on Tuesday, 27 September 2022.

The Budget is generally announced in October but it is taking place 2 weeks earlier than usual in 2022.

This document is a short summary of the main changes in taxation, cost of living supports, supports for energy costs, social welfare, health, housing, education, employment and other areas. It is an overview and not a complete statement of all the measures announced in Budget 2023.

Some of the changes announced in the Budget come into effect immediately. Others take effect from the beginning of January 2023 or later in 2023. Many others have to be finalised before coming into effect. Some elements of these measures may change when the legislation required to bring them into effect is enacted

More information on Budget 2023

You can access a range of information on gov.ie's Budget 2023 page including:

• The Expenditure Reports
• Spending review
• Ministers' speeches
• Taxation measures
• Budget publications
• The Budget in Brief

Social welfare

The Department of Social Protection allocation is €23.4 billion in 2023.

Cost of living supports

October 2022

People getting a long-term weekly social welfare payment will get a once-off payment of an extra week also called a ‘double week’ (minimum payment €20) as a cost-of-living support.

November 2022

• Double Child Benefit payment
• Once-off payment of €200 to people getting the Living Alone Increase
• Once-off payment of €400 to people getting the Fuel Allowance
• Once-off payment of €500 to people getting the Working Family Payment, Disability Allowance, Invalidity Pension, Blind Pension and carers who qualify for the Carer’s Support Grant

Social welfare increases

The maximum rate of all weekly social welfare payments will increase by €12 with proportional increases for qualified adults and people on reduced rates of payment (January 2023).

People aged 25 and under who are getting a reduced rate of Jobseeker’s Allowance will get the full €12 increase (January 2023).

The weekly rate for a qualified child will increase by €2 from €40 to €42 for children under 12 years of age. It will increase by €2 from €48 to €50 for children aged 12 years and over (January 2023).

Christmas Bonus

A Christmas Bonus of 100% will be paid in early December 2022 to people getting a long-term social welfare payment (minimum payment €20).

Child Benefit

A once-off double Child Benefit payment will be paid (November 2022). This means you will get an extra €140 per child in November.

Fuel Allowance

People getting Fuel Allowance will get a once-off payment of €400 (November 2022).

The income threshold for Fuel Allowance will increase by €80 from €120 to €200. For people aged over 70, it will increase to €500 for a single person and €1,000 for a couple (January 2023).

Disablement Benefit and half-rate Carer’s Allowance will be disregarded in the means test for Fuel Allowance (January 2023).

Living Alone Increase

People getting Living Alone Increase will get a once-off payment of €200 (November 2022).

If you get Fuel Allowance and Living Alone Increase, you will get both once-off payments.

Payments to families

People getting the Working Family Payment will get a once-off payment of €500 (November 2022).

The Working Family Payment income limits will increase by €40 across all family sizes (January 2023).

Disability and illness payments

People getting Disability Allowance, Invalidity Pension or Blind Pension will get a once-off payment of €500 (November 2022).

The earnings limit on Disability Allowance and Blind Pension will increase by €25 from €140 to €165 (January 2023).

Carers

Carers who qualify for the Carer’s Support Grant will get a once-off payment of €500 (November 2022).

Domiciliary Care Allowance (DCA) will increase by €20.50 from €309.50 to €330 (January 2023). DCA will be available for babies who remain in an acute hospital after birth for a period of 6 months (January 2023).

Employment programmes

The Community Employment (CE), Tús and Rural Social Scheme top up payment will increase by €5 from €22.50 to €27.50 (January 2023).

Farm Assist

The income received from agri-environmental schemes disregarded in the means test for Farm Assist will increase from €2,540 to €5,000 (January 2023).

Pilot food poverty programme

A pilot scheme will be developed and implemented to support people experiencing food poverty (January 2023).

Social insurance payments

Help with energy costs

€1.2 billion will be allocated for energy supports to help consumers with the costs of utilities in 2022 and 2023.

All domestic electricity customers will get €600 credit to help reduce electricity bills. The credit will be paid in 3 instalments of €200. The first payment will be made in November 2022. The second electricity credit will be made in January 2023. The third will be made in March 2023.

More people will qualify for Fuel Allowance. People getting Fuel Allowance will get an additional once-off payment of €400 in November 2022, see ‘Social welfare’ above.

The 9% VAT rate for gas and electricity is extended to 28 February 2023. The reduction of 21 cent per litre tax for petrol, 16 cent per litre for diesel and 5.4 cent per litre for Marked Gas Oil are also extended to 28 February 2023.

€340 million will be available to help community groups, schools, health services, sports clubs and other organisations to pay energy bills.

New energy supports will also be available for businesses (see ‘Employment and business’ below).

Tax

Income tax rates will stay the same (at 20% and 40%), but there will be increases to tax credits and changes to the income tax bands in 2023.

The standard rate tax band (the amount you can earn before you start to pay the higher rate of tax) will be increased by €3,200 to €40,000 for a single person and to €49,000 for married couples with one earner.

The following tax credits will increase by €75 to €1,775:

• Personal Tax Credit
• Employee Tax Credit
• Earned Income Tax Credit

The Home Carer Tax Credit will increase by €100 to €1,700.

Universal Social Charge (USC)

The ceiling of the 2% USC band will increase by €1,625 to €22,920, so that the salary of a full-time worker on the minimum wage will remain outside the higher rates of USC.

Rent Tax Credit

If you are paying for private rented accommodation, you can claim a new Rent Tax Credit of €500 a year for 2022 and subsequent years. This tax credit applies to each tenant rather than each tenancy. You will be able to claim this credit for rent paid in 2022 early in 2023.

Vacant Homes Tax

A Vacant Homes Tax will be introduced in 2023. It will apply to residential properties that are occupied for less than 30 days a year. The tax charged will be three times the amount of the Local Property Tax rate for the property.

Carbon tax

Carbon tax will increase by €7.50 per tonne of carbon dioxide emitted, from €41.00 to €48.50. This applies from 12 October 2022 for auto fuels but will be offset by a levy reduction so that it will not result in a price increase. For all other fuels, the carbon tax will increase from 1 May 2023. See ‘Environment and climate’ below, for examples of the price increases to common household fuels.

VAT (Value Added Tax)

The VAT rate for newspapers (including digital editions) will be reduced from 9% to zero.

VAT will also be reduced to zero for:

• Defibrillators
• Period products
• Hormone replacement therapy (HRT) and nicotine replacement therapy medicines that are not currently zero-rated (such as patches and gels)

These VAT changes will apply from 1 January 2023.

The reduced VAT rate of 9% for the hospitality and tourism sector will continue until 28 February 2023.

Small Benefit Exemption

The Small Benefit Exemption will increase from €500 to €1,000. Employers can give two vouchers or gifts to their employees each tax year. This increase will also be applied for the 2022 tax year.

Tobacco Products Tax

A packet of 20 cigarettes will increase by €0.50, with pro-rata increases on other tobacco products.

Employment and business

A total of €940 million is allocated to the Department of Enterprise, Trade and Employment in 2023.

Employees

Income tax rates will stay the same (at 20% and 40%), but there will be increases to tax credits and changes to the income tax bands for 2023.

The standard rate tax band (the amount you can earn before you start to pay the higher rate of tax) will be increased by €3,200 to €40,000 for a single person and to €49,000 for married couples with one earner.

The following tax credits will increase by €75 to €1,775:

• Personal Tax Credit
• Employee Tax Credit
• Earned Income Tax Credit

The ceiling for the 2% Universal Social Charge (USC) band will increase from €21,295 to €22,920 in line with the 80 cent per hour increase in the national minimum wage from 1 January 2023. This ensures that full-time employees on the minimum wage will remain outside the higher rates of USC.

The Small Benefit Exemption will increase from €500 to €1,000. Employers can give 2 vouchers or gifts to employees each tax year. This increase will also apply for the 2022 tax year.

Energy business supports

Temporary Business Energy Support Scheme (T-BESS)

Funding of €1.25 billion will be provided to help small and medium businesses with energy costs under the Temporary Business Energy Support Scheme (T-BESS). The scheme will be administered by Revenue on a self-assessment basis.

The main features of the scheme are:

• Relief of up to 40% of the increased cost of gas and electricity bills up to a maximum of €10,000 per month per business.
• The average unit price for the relevant bill period in 2022 will be compared with the average unit price in the corresponding reference period in 2021.
• Business will be eligible for support if the increase in average unit price is more than 50%.
• Payments will be backdated to September 2022 and the scheme will run until at least February 2023.

Ukraine Enterprise Crisis Scheme

A new scheme providing grants, equity and loans to viable but vulnerable businesses in the manufacturing and internationally traded sector impacted by the broader effects of the war in Ukraine and increasing energy costs.

Ukraine Credit Guarantee Scheme

A new state-backed, low-cost loan for businesses of up to €1 million over a six-year term, with no collateral required for loans up to €250,000.

Growth and Sustainability Loan Scheme

A new longer-term low-cost loan of up to €500,000 for up to 10 years, to help Small and Medium Enterprises (SMEs) including farmers and fishers to expand or invest in sustainability or energy efficiency.

Small Firms Investment in Energy Efficiency Scheme

A new grant provided through Local Enterprise Offices to help micro-enterprises to reduce their carbon footprint and energy costs.

Sectoral supports

Night-time economy

The cost of applying for a Special Exemption Order for late night opening for bars and nightclubs will decrease from €110 to €55. The measure will be implemented from midnight on 27 September 2022.

Supports for farmers

The following agricultural tax reliefs due to expire this year will be extended:

• Young Trained Farmer Stamp Duty Relief, Farm Consolidation Stamp Duty Relief and Farm Restructuring Capital Gains Tax Relief (extended to 31 December 2024)
• Young Trained Farmer Stock Relief and Registered Farm Partnership Stock Relief (extended to 31 December 2025)

VAT rates

The reduced VAT rate of 9% for the hospitality and tourism sector will continue until 28 February 2023.

Education and training

The Department of Education budget allocation is €8.7 billion in 2023.

Primary and post-primary schools

Free schoolbooks will be provided to all students in recognised primary schools from September 2023.

The child-to-teacher ratio in primary school will decrease to 23:1 with 370 extra mainstream teacher posts.

686 new teachers will be recruited to support children with special needs and 1194 new Special Needs Assistants (SNAs) will be recruited.

An additional 296 post-primary teachers will be recruited.

The enhanced Summer Programme will continue in 2023.

Third-level fees and grants

The Department of Further and Higher Education, Research, Innovation and Science allocation is €3.2 billion in 2023.

A further €8 million has been allocated to the Student Assistance Fund for the 2022/23 academic year.

Once-off measures for 2022/23 academic year

The Student Contribution is reduced by €1000 for undergraduate students who are eligible for free fees.

A double Student Maintenance Grant payment will be paid in December 2022.

Postgraduate students who qualify for the Student Grant will receive a once-off payment of €1,000.

A payment of €500 will be paid to PhD students getting Science Foundation Ireland or Irish Research Council awards.

Measures to be introduced in 2023/24 academic year

The Student Contribution will be reduced by €500 for families earning between €55,240 and €100,000.

The income threshold for the 50% Student Contribution grant will increase to €62,000 per year (currently €55,000 per year).

The Student Grant will increase by a minimum of 10% in 2023.

The Postgraduate fee grant will increase by €500 in 2023.

Apprenticeships

The student contribution fee for apprentices will be reduced by 33%. Additional support for apprenticeships includes:

• Over 2,000 additional craft apprenticeship training places
• 500 additional places on consortia-led apprenticeship programmes
• 4,500 registrations on craft programmes

Childcare

The Department of Children, Equality, Disability, Integration and Youth budget allocation is €2.4 billion.

The National Childcare Scheme subsidy will be increased from €0.50 per hour to €1.40 per hour from January 2023. This means up to an additional €40.50 reduction in weekly childcare fees for parents.

Housing

The Department of Housing, Local Government and Heritage budget allocation is €6.3 billion in 2023.

The Help to Buy Scheme is extended to the end of 2024.

If you are paying for private rented accommodation, you can claim a new Rent Tax Credit of €500 a year for 2022 and subsequent years. This tax credit applies to each tenant rather than each tenancy. You will be able to claim this credit for rent paid in 2022 early in 2023.

The tax deduction for pre-letting expenses on vacant residential properties has doubled to €10,000 per property. The period of time a property must have been vacant to claim these expenses has been reduced from 12 months to 6 months.

A Vacant Homes Tax (VHT) will be introduced in 2023. This will apply to residential properties which are occupied for less than 30 days in a 12-month period. The tax will be calculated at 3 times a property’s base Local Property Tax rate.

A Defective Concrete Products Levy will be introduced to help pay for the Defective Concrete Blocks Redress Scheme. It will be a 10% levy on concrete blocks, pouring concrete and other concrete products. It will apply from 3 April 2023.

Stamp Duty Residential Development Refund Scheme is extended to the end of 2025.

Farm Consolidation Stamp Duty Relief is extended to the end of 2025.

Social and affordable housing

Capital funding of €2.3 billion has been allocated for social and affordable housing in 2023. The funding is expected to deliver 9,100 new build social homes and over 5,550 affordable and cost rental homes.

Funding for the Housing Assistance Payment (HAP) scheme will be €544 million in 2023. This will provide 8,800 new HAP tenancies and continue to support 58,400 existing HAP tenancies.

Funding of €113 million for the Rental Accommodation Scheme (RAS) will support 800 new RAS tenancies in 2023, and continue to support 16,500 households already in the scheme.

Funding of €20 million is allocated in 2023 for the delivery of Traveller-specific accommodation.

Supports for homeless people

Funding of €215 million has been allocated to homeless services in 2023. This will support local authorities providing emergency accommodation and other services and help people to exit homelessness.

Regeneration, adaptations and remediation

In 2023, €30 million is allocated to the Croí Cónaithe Fund. This fund is used to refurbish vacant properties and help provide serviced sites for sale in towns and villages. It is also used to increase owner occupier apartment development in cities by activating planning permissions.

€67 million is provided for 12,300 grants to adapt the homes of older people and people with a disability. A further €25 million is allocated for adaptation works to 1,800 existing social homes.

Funding of €65 million is provided to support the remediation of homes affected by pyrite and defective concrete blocks under the Pyrite & Mica Remediation Scheme.

Funding of €87 million is provided to retrofit at least 2,400 social homes to bring them to a BER of B2 to make them more energy efficient.

Health

The Department of Health has been allocated € 23.4 billion in 2023.

Hospital in-patient fees

Public hospital in-patient fees will be removed for all patients from 1April 2023.

Free GP visits

GP visit cards will be extended to children aged 6 and 7 by end 2022.

The income limit for the GP visit card will be increased to include people on or below the median income from April 2023.

Women's health

Women’s health funding of €32.2 million includes:

• Extending the age range for free contraception to include women aged 16 to 30 (from 1 September 2023)
• Funding for IVF treatment in the public health system (from September 2023)
• Provide repayments for morning sickness medicines
• Funding to set up a Breast Implant Registry
• Additional Women’s Health Hubs (July 2023)

COVID-19

€757 million is being allocated in 2023 for COVID-19 measures including:

• €439 million for public health measures, such as testing and contact tracing, COVID-19 vaccines and for personal protective equipment (PPE) across the health service
• €225 million to reduce hospital waiting lists and other backlogs caused by COVID-19
• €50 million for capital measures related to COVID-19

VAT

VAT will be reduced to zero for:

• Defibrillators
• Period products
• Hormone replacement therapy (HRT) and nicotine replacement therapy medicines that are not currently zero-rated (such as patches and gels)

These VAT changes will apply from 1 January 2023.

Disability services

Once-off funding of €11.7 million to reduce backlogs in getting an Assessment of Need.

Older people and people living with dementia

Additional funding is provided for:

• Implementing Healthy Age Friendly Homes nationally
• Broadening the Meals on Wheels service
• Dementia supports
• Implement the new national safeguarding policy for the health and social care sector

Oral health

€7.1 million is provided for oral healthcare measures including oral healthcare packages for children aged under 7.

Separately, €9 million once-off funding is provided to reduce waiting lists in orthodontics.

Environment and climate

The Department of Environment, Climate and Communications has been allocated €850 million in capital expenditure in 2023.

Carbon tax

Carbon tax will increase by €7.50 per tonne of carbon dioxide emitted, from €41.00 to €48.50. This applies from 12 October 2022 for auto fuels but will be offset by a levy reduction so that it will not result in a price increase.

The carbon tax increase will apply to all other fuels (including household fuels) from 1 May 2023.

The tables below show the estimated price increases on commonly-used household fuels:

Energy upgrades

In 2023, €337 million will fund over 37,000 home energy upgrades including upgrades under the Warmer Homes Scheme for households in, or at risk of, energy poverty. €291 million of this funding is being provided from carbon tax revenue.

The introduction of a new low-cost loan scheme for residential retrofit. Credit institutions will be able to offer loans at reduced interest rates to private homeowners and non-corporate landlords to make home energy efficiency upgrades.

Electric vehicles

The €5,000 relief towards the private purchase of qualifying electric vehicles (EVs) will continue with a gradual reduction in the grant from July 2023. The home charging infrastructure scheme will continue to include multi-unit dwellings. The Low Emission Vehicle Toll Incentive Scheme is also continuing.

Transport

A total of €3.5 billion is allocated to the Department of Transport in 2023.

This includes funding for:

• BusConnects, MetroLink and the DART expansion programme
• Carbon reduction programmes and public transport
• Active Travel, cycling, walking and greenways
• National, regional and local roads
• Public transport projects and funding for Local Link services
• Aviation industry, including support for regional airports, Shannon, Ireland West, Donegal, and Kerry through the Regional Airports Programme (RAP) 2021-2025
• Maritime transport and safety, including support for the Irish Coast Guard and the Commissioner of Irish Lights
• Continued funding for the Safe Routes to School Programme
• Provision of transportation services for Ukrainian refugees
• Additional staff in Transport Infrastructure Ireland, the National Transport Authority and the Medical Bureau of Road Safety

Public transport fares

Reduced fares of 20% on public transport will continue until the end of 2023. The 50% price reduction on the Young Adult Leap Card will continue until the end of 2023. The Young Adult Leap Card will be extended to 16, 17 and 18 year olds in third-level education.

Electric vehicles

The €5,000 relief towards the private purchase of qualifying electric vehicles (EVs) will continue with a gradual reduction in the grant from July 2023. The home charging infrastructure scheme will continue to include multi-unit dwellings. The Low Emission Vehicle Toll Incentive Scheme is also continuing.

Carbon tax

Carbon tax will increase by €7.50 per tonne of carbon dioxide emitted, from €41.00 to €48.50. This applies from 12 October 2022 for auto fuels but will be offset by a levy reduction so that it will not result in a price increase. For all other fuels, the carbon tax will increase from 1 May 2023.

Justice

The Department of Justice is allocated €3.3 billion in 2023, which includes funding for:

• Up to 1000 new Garda trainees
• Over 400 Garda staff
• Investment in resources, like body cams, vehicles and a new aircraft
• A Community Safety Innovation Fund to reinvest CAB seizures back into communities
• The Zero Tolerance Plan for tackling gender-based and domestic violence
• Youth justice
• 100 new prison officers
• The response to the Ukrainian crisis
• Extra staff for the International Protection Office
• The new Gambling Regulatory Authority

Assisted Decision-Making (Capacity) Act

The Legal Aid Board is allocated an additional €3 million for 2023 for legal advice and support to individuals under the Assisted Decision-Making (Capacity) Act 2015, due to be commenced shortly.

Data Protection Commission

Additional funding of 13.5% (to €3 million) for the Data Protection Commission to fund 2 new Commissioner posts, an allocation for increased legal costs and a review of governance structures. This additional data protection allocation aims to uphold the fundamental rights of individuals in the EU to have their personal data protected.

Defence funding

Total defence funding is €1.174 billion in 2023. This funding includes:

• Ongoing replacement and upgrade of essential military equipment, building and maintenance works and ICT projects
• An increased pay and pensions budget
• An extra €22 million for operational and standing costs including new recruits and training
• Funding for Civil Defence and the Irish Red Cross Society

Other announcements

Brexit

Ireland has been allocated 20% of the European Brexit Adjustment Reserve (BAR). This is €565 million in 2023.

Provisional allocation for public service pay

€1.4 billion has been set aside to cover the costs of the proposed extension of the Building Momentum Public Service Pay Agreement. If this is agreed, funding allocations will be made in the Revised Estimates in December 2022.

Reserve funds for COVID-19 response, Ukraine and Brexit

€2.7 million is held in reserve for additional expenditure including COVID-19 response, supports for the State’s response to Ukraine and the Brexit Adjustment Reserve.

Courtesy of https://www.citizensinformation.ie/en/money_and_tax/budgets/budget_2023.html