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Budget 2020: Main points you need to know

Social Welfare

Minister for Finance Paschal Donohoe unveiled Budget 2020 yesterday and pledged €690 million in 2020 for the Department of Employment Affairs and Social Protection.

Other changes include: 

-The Christmas Bonus remains the same as last year at 100% for all social welfare recipients this year. There will also be an increase in Jobseeker’s Allowance for 25-year-olds to €203. For people aged between 18 and 24 who receive housing support, the rate of Jobseeker’s Allowance will also increase to €203. 

-The Living Alone Allowance increases by €5 in 2020. 

-One Parent Family Payment increases by €15.

-Working Family Payment income threshold will increase by €10 for families with up to three children. 

-The Qualified Child Payment will increase by €3 for children over 12 and €2 for children under 12. 

-One million additional home care hours will be provided in 2020. 

-Those in receipt of Carer’s benefit can work or study up to 18.5 hours per week (up from 15). 

-Home Carer Credit increases by €100 to bring the value of the credit to €1,600. 

-Fuel allowance increases by €2.

Housing

The Help to Buy scheme has been extended for another two years to 2021. Also announced was funding of €1.1 billion to build social housing and an additional €80 million for the Housing Assistance Payment (HAP) scheme.

 €2 million to the Residential Tenancies Board to ensure rent-pressure zone measures are properly enforced.

Health

Health expenditure is to increase by 6.3% to €17.4 billion in 2020. Announced also was €25m extra for National Treatment Purchase Fund while the Drug Payment Scheme threshold reduced by €10 per month.

A 50 cent reduction in prescription charges applies to all.

Medical card income thresholds for over 70 increased by €50 for single people and by €150 for couples.

Free GP care is to be extended to children under the age of eight and free dental care for children under 6 – it is unclear as to when these measures come into effect but it is likely next September 2020.

Education

€11 billion for the Department of Education and Skills.

150 new teaching posts in schools are to be created. There will be a €1.9 billion investment in special education to hire over 1,000 special needs assistants.

The National Training Fund levy will increase by 0.1%.

Business , Enterprise and Innovation

€1 billion is to be allocated to the Department of Business, Enterprise and Innovation. €10 million of which will be allocated to a Disruptive Technologies Innovation Fund.

The annual investment limit for the Employment and Investment Incentive (EIIS ) scheme will be increased to €250,000 (EIIS scheme). An annual investment limit of €500,000 will be introduced for investors who are prepared to invest in the EIIS scheme

Research and Development tax credit (R&D) will be increased from 25% to 30% for micro and small companies. Key Employee Engagement Fund (KEEP) – there will be greater flexibility for employees availing of the KEEP Special Assignee Relief Programme (SARP) will be extended until the end of 2022.

Tax

There were no changes to income tax

In relation to Capital Acquisitions Tax, the Group A tax-free threshold increased from €320,000 to €335,000 .

As expected, the 12.5% rate of corporation tax remains the same.

Agricultural and Rural

€51 million extra for the Department of Agriculture, Food and the Marine. €2 billion investment in rural Ireland because of the “ Challenges facing our rural economy, such as Brexit, globalisation and climate change, will necessitate adaptation over time”

€17 million for the Department of Rural and Community Development.

€3 million allocation to pilot new agri-environmental schemes in 2020.

Climate Measures and Carbon Tax

A much-expected increase in carbon tax was announced. An increase of €6 per tonne (to €26) on petrol and diesel came in to effect at midnight on the 8th October 2019. Home heating fuels increases will come into effect in May 2020.

Petrol and diesel prices increase by 2c per litre as of midnight on the 8th October 2019.

A new tax based on a vehicles nitrogen oxide (NOx) emissions will be applied to cars registering for the first time from 01/01/2020.

VRT relief for hybrid vehicles extended to 2020. Benefit in Kind zero rate on electric vehicles extended to 2020.

€13 million for the Warmer Homes scheme. The Minister said “I am providing €13 million for the Warmer Homes scheme to provide free energy efficiency upgrades to households deemed to be in or at risk of energy poverty,”

Brexit Fund

A well flagged €1.2 billion Brexit fund (excluding EU funding) was announced in the budget yesterday. In particular if there is a no deal Brexit, €650 million will be provided for agriculture, enterprise and tourism. €110 million will be provided through the Department of Agriculture, Food and the Marine to support the fish and beef industries after Brexit. Broke down as follows; 

€85 million to beef farmers 

€14 million for fisheries. 

€6 million for livestock and mushroom farmers 

€5 million for the food and drinks industry

€40 million will be used to support the tourism sector in event of no deal Brexit.

Please note that this Budget summary is merely a guide and should not be used as a substitute for professional advice taking into account your individual circumstances.


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