The Minister for Finance and Public Expenditure & Reform, Mr. Paschal Donohoe presented his Budget speech on Tuesday 9th October 2018. The following changes have been announced and are due to take effect from 1st January 2019, unless otherwise stated.
SRCOP | 2018 | 2019 |
Single/Widowed Person or | First €34,550 @ 20% | First €35,300 @ 20% |
Surviving Civil Partner | Balance @ 40% | Balance @ 40% |
Qualifying for the Single Person | First €38,550 @ 20% | First €39,300 @ 20% |
Child Carer Tax Credit | Balance @ 40% | Balance @ 40% |
Married Couple or Civil | First €43,550 @ 20% | First €44,300 @ 20% |
Partnership – One Income | Balance @ 40% | Balance @ 40% |
Married Couple or Civil | First €43,550 @ 20% | First €44,300 @ 20% |
Partnership – Two Incomes | Plus an amount equal to the lower income (subject to a maximum of €25,550) | Plus an amount equal to the lower income (subject to a maximum of €26,300) |
Balance @ 40% | Balance @ 40% |
Rate Bands | Rate |
Up to €12,012 | 0.5% |
Next €7,862 | 2% |
Next €50,170 | 4.5% |
Balance | 8% |
Employer PAYE Compliance
The implementation of PAYE modernisation is expected to yield an additional €50m savings to the Exchequer from increased compliance levels of employers.
Deductibility of Interest for Landlords
The deduction for interest accruing on loans used to purchase, improve or repair rented residential property is restricted to 85% of the interest accruing in 2018. This will be restored to 100% in 2019.
VAT
The 9% VAT rate for the tourism and hospitality sector will be increased to 13.5%. However, the 9% rate will be retained for newspapers and sports facilities. The VAT rate for e-books and electronic newspaper publications will be reduced from 23% to 9%.
Excise Duty
There is no increase in excise duty on petrol, diesel or alcohol products.
The excise duty (including VAT) on cigarettes will increase by 50 cent on a packet of 20, with a pro-rata increase on other tobacco products from midnight on 9th October 2018.
Vehicle Registration Tax (VRT)
VRT for cars is based on the open market selling price (OMSP) and the CO2 emission level of the car. VRT rates range from 14% to 36% of the OMSP. The VRT rate for diesel cars will be increased by 1%.
VRT relief for hybrid and plug-in electric hybrid vehicles will be extended for 2019.
Capital Acquisitions Tax (CAT)
The current Group A threshold of €310,000 will be increased by €10,000 to €320,000. Group A primarily applies to gifts or inheritances received by a child from a parent.
Finance Bill 2018
The Department of Finance is due to publish Finance Bill 2018 on Thursday 18th October 2018.
Employment Law
National Minimum Wage
The National Minimum Wage will increase by 25 cent from €9.55 to €9.80 gross per working hour in respect of hours worked on or after 1st January 2019.
Paid Parental Leave
The Budget provides for 2 additional weeks paid parental leave per parent (paid by the DEASP) to be introduced in November 2019 which must be taken during the first year following the birth of a child. The Minister outlined his intention to increase this leave to 7 weeks over the coming years.
PRSI
The weekly threshold for the higher rate of employer PRSI will be increased from €376 to €386. This will ensure that an employer will pay the reduced rate of employer PRSI of 8.7% in respect of an employee working a 39 hour week who is paid the national minimum wage.
National Training Levy
The National Training Levy which is currently collected as part of the Employer PRSI contribution under PRSI Class A will increase from 0.8% to 0.9% in 2019 and to 1% in 2020 to fund further and higher education. This will result in a combined rate of employer PRSI and Training Levy as follows under PRSI Class A, based on the current rates of employer PRSI:
| 2018 | 2019 | 2020 |
Employer PRSI Class A Reduced Rate | 8.6% | 8.7% | 8.8% |
Employer PRSI Class A Higher Rate | 10.85% | 10.95% | 11.05% |
Social Welfare Payments
There will be a €5 increase in the rate of all weekly Social Welfare payments with effect from week commencing 25th March 2019, with a proportionate increase for qualified adult dependants. The rate payable for a qualified child will be increased from €31.80 to €34 per week for children under 12 and to €37 per week for children aged 12 and over.
The maximum personal rate of Illness Benefit and Jobseeker’s Benefit will be increased to €203 and Maternity Benefit and Paternity Benefit will be increased to €245 per week.
A Christmas bonus of 100% of an individual’s weekly payment will be paid this December to recipients of long-term Social Welfare payments.
The income disregard for One Parent Family Benefit will be increased by €20 from €130 to €150.
The Weekly Fuel Allowance of €22.50 will be paid for 28 weeks in 2019, up from 27 weeks in 2018.
The Back to School Clothing and Footwear Allowances will be increased by €25 for each qualifying child.
Extension of PRSI Benefits to Self-Employed Individuals
The rates of PRSI for Class S will remain unchanged but the range of benefits available to Class S contributors will be extended to include Jobseeker’s Benefit in late 2019.
Prescription Charges
Prescription charges for medical card holders aged 70 or over will be reduced by 50 cent from €2.00 to €1.50 per item.
Drugs Payment Scheme
The monthly threshold for the Drugs Payment Scheme will be reduced by €10 from €134 to €124.
GP Visit Card
The weekly income limit for qualifying for the GP Visit Card will be increased by €25.
Dublin West 5th Nov | Sligo 6th Nov | Cork 7th Nov | Dublin North 7th Nov | Athlone 8th Nov | Kilkenny 9th Nov | Dundalk 12th Nov |
Limerick 13th Nov | Dublin West 13th Nov | Wexford 14th Nov | Galway 15th Nov | Dublin City 16th Nov | Dublin South 20th Nov | Letterkenny 23rd Nov |