Budget 2016Ministers Michael Noonan & Brendan Howlin announced the 2016 Budget provisions this afternoon. Some of the headline points in Budget 2016 are as follows;     USC

  • The 1.5% rate of USC will be reduced to 1.0%
  • The 3.5% rate of USC will be reduced to 3.0%
  • The 7% rate of USC will be reduced to 5.5%
  • The entry point to the USC will rise from €12,012 to €13,000
  • The entry brackets for all levels have also changed
  • It’s expected that some 700,000 earners will be outside the USC net completely

Income Tax

  • Inheritance tax threshold increases to €280,000 from €225,000
  • Introduction of ‘tapered PRSI credit’ with a maximum level of €12 per week to alleviated the ‘step effect’ across a range of incomes
  • Capital gains tax for self-employed and entrepreneurs drops to 20% from 33%
  • ‘Earned Income Tax Credit’ to the value of €550 for self-employed  workers who didn’t have access to the PAYE tax credit
  • Three year tax relief for startups until 2018

Pensions

  • Pension fund levy has done its job apparently and is no longer needed. The 0.15% levy as it currently stands will no longer apply from January 2016

Motor Tax

  • Commercial tax rates on vehicles are to be made less complex – the range of brackets will reduce from 20 to five, ranging from €92 to €900

Cigarettes and Alcohol

  • The cost of a pack of 20 will increase by 50c to €10.50. This was well foreshadowed. It’ll raise €61.4 million for the exchequer in 2016, and is the only tax increase in the budget
  • Excise duty on alcohol will remain unchanged

Tourism

  • 9% VAT rate for tourism sector to remain unchanged

Film

  • Cap on eligible expenditure increased to €70 million

NAMA

  • The bad bank will build 20,000 social housing units buy the end of 2020, which leads to a deal of heckling from the galleries

The home carer’s tax credit is to be increased by €190 to €1,000 bringing it back in line with pre-2011 levels. The revaluation date for Local Property Tax (LPT) is to be moved from 2016 to 2019, suggesting that rising house prices will not hit homeowners in 2017 with greatly increased LPT. Jobs

  • The minimum wage is to increase by 50c to €9.15 as recommended by the Low Pay Commission

Child Benefit

  • Free childcare to be made available for children from age three to 5 1/2, or the beginning of primary school
  • Child benefit increases from €135 to €140 per month
  • Family income supplement is being increased by €5  per week for families with one child and by €10 for those with two or more children
  • Two weeks paternity leave on the way for fathers. Good time to become a dad

Education

  • Budget of €8 billion allocated to education this year
  • 2,260 new teaching posts, 600 new resource teachers
  • Pupil teacher ratios to decrease: from 28:1 to 27:1 for primary classes, and 19:1 to 18.7:1 for secondaries.

ATM and Debit cards

  • €5 charge to be scrapped, to be replaced by a 12c charge per ATM transaction.

Christmas Bonus

  • Will increase to 75%, a threefold increase on last year’s payment

Health

  • Health is a big winner with €13.2 billion allocated for the year
  • As expected free GP care is now extended to the under-12s

Housing

  • €414 million for social housing this year, which equates to an additional 14,000 households
  • Allocation for emergency accommodation of the homeless is to be increased by €17 million

Agriculture and the Marine

  • €1.3 billion allocated to the Department of Agriculture for the year

Justice and Defence

  • There’s 600 new gardaí going to be recruited
  • €903 million allocated to defence, as Howlin commends the work of our defence forces in dealing with the Mediterranean migrant crisis

1916

  • €50 million has been allocated to the hundredth anniversary of the Easter Rising’s commemoration programme