With the budget last week, we are going to break with the normal structure of Q&A to try to answer as many queries that have been raised by readers on how various budget measures will affect them.
Mortgage interest relief
My tracker mortgage balance is about €550,000. My monthly repayments have increased by around €2,000 per month over the past year. Am I entitled to the relief on the portion of the mortgage up to €500,000?
Mr M.K.
The Government seems particularly keen to be seen to offer only a modest mortgage interest tax relief, hence the mortgage balance limits. I presume they feel anyone with a balance below €80,000 is close enough to the end of their loan that the interest rises have not been punitive in terms of their personal budgets; those at the other end – with balances above €500,000 like yourself – would likely be seen as having sufficient financial capacity to weather the mortgage interest increases.
Either way, it seems that this is a straight in-or-out scenario. Either your personal circumstances fit the Ts and Cs of the relief or you are shut out.
From your point of view that means no relief as your mortgage balance is above the €500,000 at the end of last year.
The same goes for those on fixed rates where the interest rate was the same last year and this year, regardless of how pressed they are. Again, I presume the thinking is that if you got on a fixed rate early last year or before, as many people did, it was fairly attractively priced.
In all, about 165,000 homeowners out of 567,000-odd holders of residential mortgages will benefit from the scheme, or just under 30 per cent.
Free schoolbooks
How much is the Government giving to fund primary schoolbooks this year? It was €55 million last year and we’re told €67 million for Junior Cert now this year. What’s the figure for primary this year, or does the €67 million cover both?
Ms M.C.
From the start of the current school year, not last year, the Government has funded free schoolbooks in all primary schools. A sum of €96 per head was allocated to each of the 558,000 pupils in 3,230 schools across the State. Doing the sums on that, it would appear to have cost the Government €53.57 million.
The budget has announced that the scheme will, from the school year starting September 2024, extend the scheme to cover about 210,000 secondary school students in years up to and including Junior Certificate.
Books are more expensive at second level and the cost per student will be about €315, giving a bill for that end of the scheme of just under €67 million.
Interestingly, parents of pupils in private schools will not benefit as the scheme is limited to students in “recognised post-primary schools within the Free Education Scheme”. When this was raised with the Minister for Education, Norma Foley, she said that was in line with the primary school free books scheme. Possibly because there are so few private primary schools in Ireland, this has not raised its head as an issue until now.
So the €67 million announced in the budget will just cover the cost for secondary schools, with the primary school bill coming in as an additional €54 million or possibly slightly more or less when the figure for next year is announced.
Child benefit
My daughter turned 18 in June 2023. She is still in school in sixth year. Can we claim back child benefit since June since she is now eligible for child benefit? How do we do that?
Ms D. R.
This measure attracted a significant amount of interest from parents in our post-budget online Q&A and that’s hardly surprising. Child benefit is paid at a rate of €140 a month, a significant financial fillip for hard-pressed parents.
The bad news is that it is going to be of no use to anyone who currently has an 18-year-old in the house, unless they turned 18 in the past few weeks.
The measure will not kick in until next September and will apply only to children who are 18 at that time. There will be no retrospective payment in respect of children who are 18 now and not currently in receipt of the payment.
What went unsaid in the wake of the budget interest over the extension of the benefit to 18-year-olds in full-time education is that the rate of child benefit itself was once again not increased in the budget this year.
Pensioners
Are pensioners getting two double weekly payments – one at Christmas and one in January for cost of living?
Mr L.R.
That is the case. The Minister announced that pensioners will receive their annual Christmas bonus payment this year, as will other welfare recipients. It will be paid in December.
They will also benefit from the double payment being offered under the budget’s package of one-off cost-of-living measures in January, as again will most other welfare recipients.
Is there an increase for a qualified adult?
Mr P.C.
There is. In relation to the contributory State pension, the pensioner is getting a €12 increase in the maximum rate payable, bringing it to €277.30 from January – or to €287.30 if they are over the age of 80. In either case, if they have a qualified adult under the age of 66, the allowance for that person is rising by €8 to €184.70. That jumps to €248.60 for qualified adults aged 66 or older, a rise of €10.80.
If your State pension is non-contributory, the maximum payable for a person with a qualified adult will be €441.70, €19.90 ahead of this year.
If you are on the invalidity pension with a qualified adult, your payment will increase in January to €407.20 a week, €20.60 more than this year. The personal rate for those with no qualified adults is again up by €12 to €237.50.
For those on certain benefits – jobseekers, illness, injury or health and safety – the maximum weekly rate available next year if you have a qualified adult will be €386, up €20 on what you are getting now.
Most means-tested allowances – farm assistance, jobseekers over the age of 25, disability allowance and the blind pension – will jump €20 to a maximum of €386 for those with qualified adults.
For supplementary welfare allowance, the €20 hike brings the upper payment to €384 a week, except for those under the age of 25 not living independently where the upper limit jumps by €24 to €283.40, the same as for those under 25 on jobseekers’ allowance.
In all cases, the personal rate is €12 a week higher, or pro rata for those not on the full payment.
College fees
We just paid over €3,000 for college fees for the 2023-2024 term. Are we due a rebate or is the €1,000 applicable only to fees paid next year?
Mr M.K.
Another element of the cost-of-living package was a one-off reduction of €1,000 in the registration fee paid by most third-level students. It applies to fees for the current academic year – 2023-2024.
For most families, it means that the second payment usually made in January will be just €500, instead of the €1,500 they had expected to have to find. However, for those people like you who have already paid the full fee for the academic year, that money will be returned by your child’s college.
If they don’t get in touch with you over the coming weeks, you should contact the college to clarify how they will arrange the refund.
Home purchase
Is there anything in the budget for young adults trying to purchase a home? There was some speculation pre-budget relating to the establishment of a help-to-buy scheme for previously owned homes. As a young couple regularly seeing houses go for +10 per cent over asking price, is there anything to be hopeful about?
Ms L.S.
The help-to-buy scheme has been extended for another two years – to the end of 2025 – but there was no movement on the type of property covered. It must be a newly-built home or one that you are building yourself.
There will, however, be the now familiar review of the scheme over the next 12 months to see how it is operating and I have no doubt that the issue of extending it to cover the purchase of second-hand properties will be trawled over again.
Of course, while homebuyers are understandably interested in the added financial muscle that help to buy offers them in their pursuit of a home, the original intent of the scheme was to incentivise developers to build more homes. And if you start including second-hand purchases in the programme, you kind of water down that incentive.
But I can certainly understand the frustration of first-time buyers at the outer limits of what they can afford seeing the prices of new homes rising faster than the market in general, leaving ownership tantalisingly out of reach.
Rent tax credit
Can I claim tax relief for my daughter’s rent as she’s a student in apartment in Amsterdam?
Ms S.S.
There are a number of qualifying criteria in relation to the rent tax credit, some of which were loosened in this year’s budget to include parents with a student child living in digs or in someone’s house under the rent-a-room scheme.
However, it remains the case that the credit can be claimed only in relation to rent paid to stay at a property in the State. So your daughter’s student apartment in Amsterdam will not qualify, and nor will the accommodation of those parents whose children are studying in Northern Ireland or Britain.
Landlord tax relief
If you have two rental properties is the tax relief doubled? Or is it a single tax relief irrespective of number of rented properties?
Mr J.T.
I assume here that you are asking in relation to the landlord tax relief which interestingly the Government has chosen to name Rented Residential Relief with no use of the word landlord.
There is quite a lot of detail that we still need to see on this measure and much of that is likely to be contained in the Finance Bill which will be published at the end of the week – or in subsequent amendments to it. What we have been told so far is that it is a relief assessed against rental income, with no suggestion that it is to be assessed per rental property.
The Government will allow relief at the 20 per cent standard income tax rate on the first €3,000 of rental income next year, €4,000 in 2025 and €5,000 in 2026 and 2027. This means that a landlord will be able to secure maximum relief of €600 next year, €800 in 2025 and €1,000 in each of the following two years.
It is worth noting that, to qualify, your properties will have to be registered with the Residential Tenancies Board or let to a public authority, such as the local council.
In addition, if you apply for the relief, you will be obliged to keep any rental properties you own at that time on the rental market for at least four years from the time you apply. If you do take any off the market for whatever reason, Revenue will claw back in full the benefit you have received under this measure up to that time.
Obviously, if people could claim “per property” in the manner you suggest, they would exceed the limits put in place, which are limits per landlord and not per property.
Retrofitting
Is there anything in the budget in relation to retrofitting homes for energy saving either through grant increase or tax credits?
Ms B.D.
Interesting one this, given how high a priority it is, especially for the Green Party in Government. I don’t think the word retrofitting appeared in a single budget headline, so low profile was it this time around.
And that’s surprising because the budget expenditure reports outlining what is being given to each department noted that the Department of the Environment, Climate and Communications was given “record” funding of €380 million for Sustainable Energy Authority of Ireland residential and community energy upgrades schemes (including the solar PV scheme) to “support the delivery of our National Retrofit Plan”.
That is a 12.75 per cent increase on last year with the programme now being fully funded by carbon tax revenue.
But, unlike last year, when the department said the money available would support 37,000 energy upgrades, they were careful to put no target number out there on this occasion.
More significantly, there was not a word said about the low-cost loan scheme, which was promised last year to make energy efficiency upgrades more affordable for private homeowners and small landlords. We’re still waiting. Th silence in this year’s budget on the issue – not a mention – is hardly encouraging for those waiting for such a loan to make big energy efficiency upgrades affordable.
So more money has been made available for existing schemes but no new initiatives were announced this time around and the department still clearly has significant work yet to do to deliver on the commitments made last year.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
