It may be a distant memory, but many of the changes announced in last October’s budget are set to kick in this month.
Although it was pitched as a giveaway budget, many of these benefits were one-off bumps – such as the two double child benefit payments before Christmas, and the €400 payment to those getting the working family benefit.
As we noted at the time, changes on the personal tax front were a lot more muted than they might have been. This means that while you will get to keep more of your wages this month, the increase is likely to be less than you might have hoped for.
But just how much might you save?
Income tax
As was the case last year, the big gain for taxpayers will be among those earning more than €42,000 (for a single person), who will now find that they will pay tax at the standard rate on a greater proportion of their income, thanks to a €2,000 increase in the standard rate band. This alone will mean extra take-home pay of about €400 a year.
Other changes include a €125 increase in the personal, PAYE and earned income tax credits, as well as changes to the universal social charge (USC) where the 4 per cent rate will fall back to 3 per cent, and will apply on earnings of €27,382-€70,044.
These changes mean a single person earning €60,000, for example, will get to keep €79 extra a month; a married couple with one earner on €100,000 will save €95 a month; and a married couple with two incomes will save €156 a month on combined earnings of €150,000.
Not bad, but maybe not enough to deal with the increased cost of living either.
Those who benefit from a bonus from their employer will also stand to save further, thanks to the increase in the small-gift scheme. It means you will be able to get a voucher worth up to €1,500 a year from your employer, tax free, from January.
Housing
If you’re renting, the latest increase to the rent credit means that, depending on where you live, you could be looking at a month’s free rent this month.
This is because the credit has increased to €1,000 for a single person (€2,000 for a couple) for 2025. And not only that, but the increase also applies retrospectively to 2024. This means that if you already claimed the credit last year, you should be due a further €250 back in tax, if you haven’t already received it.
To claim the credit you can do so via “Manage your Tax 2024″ on myAccount.
If you own your home and have a mortgage on it, you might be eligible to claim mortgage interest relief once again. This credit, first introduced in 2023, is worth up to €1,250.
To qualify, you must have had a mortgage balance of €80,000-€500,000 at the end of 2022, and you must have been be paying more interest in 2024 than you did in 2022.
While it was expected that more than 200,000 mortgage accounts would be eligible, and that the scheme would cost about €125 million a year, figures show that many people have not yet claimed it.
At the end of last June, only 22,500 taxpayers had claimed the credit, with refunds of about €19 million granted.
If you think you might be entitled to the credit, you can apply for it by filing a tax return for 2024 (and 2023 also if you have not yet done so).
If you’re one of the smaller landlords who are not thinking of selling up – and reports suggest this is a diminishing number – then there is also something for you this year. A tax cut announced in the budget will apply this year for smaller landlords who commit to staying in the rental market until 2027 at least.
The reliefs kick in for the 2024 tax year, so when smaller landlords file their tax returns this October/November, they will see a reduction in their tax bill, all other things being equal.
The measure will save landlords €600-€1,000 a year, by allowing them to pay tax at the lower rate on more of their net rental income. This will be €3,000 in 2024, rising to €4,000 in 2025 and €5,000 in 2026 and 2027 – although the universal social charge and PRSI will still apply.
Welfare payments
From this month, pensioners will see an increase of €12 in their weekly payment. This amounts to a gain of €624 a year, or €1,248 for a couple. The fuel allowance means test disregard for those aged 66 and over will also increase, up to €524 for a single person, and €1,048 for a couple.
It’s not the only increase: the maximum rate of maternity, adoptive, paternity and parent’s benefit will increase by €15 this month, with all other weekly payments going up by €12. The working family payment income limits will go up by €60 a week.
Carers who get the carer’s allowance will now qualify for the fuel allowance – worth €33 a week for 28 weeks – while carer’s benefit will be extended to people who are self-employed, also from this month.
Further changes for carers are on the way in the months ahead, although not the one many carers have called for – the abolition of the means test for the allowance. Instead, the income disregard to claim the allowance will increase to €625 for a single person and €1,250 for a couple from July, while the support grant will increase by €150 to €2,000 from June.
There will also be a €20 increase in the domiciliary care allowance, which will increase by €20 to €360 a month.
Families with a newborn baby born since December 1st, 2024, will get a once-off newborn baby grant of €280 (in addition to normal child benefit of €140 a month).
Wages
Those earning the minimum wage will see an increase of 80 cent in their hourly rate from this month, up to €13.50 an hour. This means a gain of €32 a week based on a 40-hour working week (the rate for under-18s will increase to €9.45; €10.80 for 18-year-olds; and €12.15 for 19-year-olds).
And there will be an increase in other payments; those on Community Employment, Tús and the Rural Social Scheme will get an increase of €12 a week, while those on the work placement experience programme will get an increase of €24 a week.
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