Chris Murray of Casey and Co. looks at the main points of Budget 2015 as it pertains to families…
On 14 October 2014, Minister for Finance, Michael Noonan introduced Budget 2015. It is the first post austerity Budget and it is hoped that this trend can continue. Below we outline how the budget will affect families.
Main points of Budget 2015 to impact families:
Income tax
• Income tax relief introduced on water charges worth up to €100 per year per household.
• Income tax relief available at the Standard Rate in respect of water charges up to a maximum of €500 per household per year.
Universal Social Charge
• Entry point to USC increased to €12,000.
• USC reduced from 2% to 1.5% and 4% to 3.5%.
• Top 1% of income earners now paying 21% of all income tax and USC collected.
Consumer taxes
• Price of cigarettes to increase by 40c a pack from midnight tonight.
• Extra 20c per 25g of rolling tobacco.
• No change to taxes on alcohol.
• No tax increase for petrol, diesel, motor tax or VRT.
Social welfare
• Extra €10million to be provided for accommodation and related services for the homeless.
• €12million allocated to JobPath initiative in 2015, which will match long-term unemployed with appropriate training & opportunities.
• No cuts to social welfare schemes.
• Increase in Child Benefit of €5 per child in 2015 and a further €5 per child in 2016 if resources allow.
• Families can retain full Qualified Child Increase of €29.80 per week, per child for first year of returning to work and 50% for 2nd year.
• Household benefits package will be increased by €100 to alleviate water charges cos and water subsidy will be extended to all on fuel allowance schemes who don’t get household benefits package.
Health, education and social services
• €3bn allocated to older people and disabled services in 2015.
• €8.3bn allocated to Education. No decrease in teacher or special needs assistant numbers; in fact, 1,700 additional full time teachers and SNA’s will be recruited.
• €975m to be allocated to support the new Child and Family Agency, TUSLA.
• Living Alone Allowance rate increased to €9 per week, benefiting almost 180,000 elderly people from January 2015
Below are two case studies of how Budget 2015 will affect a family:
A married couple in PAYE employment with dependent children will see the following changes to their payslips next year:
• Reduction is USC rates from 2% to 1.5% and 4% to 3.5% with an additional rate of 8% applicable to incomes over €70,000
• Increase of entry level for USC to €12,012 and entry level to top rate USC to just above minimum wage (estimating €17,577)
• Top rate of Income Tax reduced from 41% to 40%
• Increase in Standard Rate band for highest income earner from €41,800 to €42,800 for married couples
• Up to €500 Tax Relief on Water Charges at Standard Rate of 20% (worth up to €100 per household)
• Child Benefit increased by €5 per child per month for all families (€60 per child per year)
A single person in PAYE employment with dependent children will see the following changes to their payslips next year:
• Reduction is USC rates from 2% to 1.5% and 4% to 3.5% with an additional rate of 8% applicable to incomes over €70,044
• Increase of entry level for USC to €12,012 and entry level to top rate USC to just above minimum wage (estimating €17,577)
• Top rate of Income Tax reduced from 41% to 40%
• Increase in Standard Rate band from €32,800 to €33,800 for single person
• Up to €500 Tax Relief on Water Charges at Standard Rate of 20% (worth up to €100 per household)
• Child Benefit increased by €5 per child per month for all families (€60 per child per year)
• Chris Murray is Practice Manager at Casey & Co Accountants & Auditors. Casey & Co. strive to add real value to your business by providing specialist services in the areas of personal taxation, business start up, restructuring, bank negotiations and succession.
