Lloydbowmaker

BUDGET 2021

#lloydbowmaker

€25.13 billion to be spent on Social Welfare in 2021

In her first budget, as Minister for Social Protection, Heather Humphreys has secured an overall package of over €25bn for social welfare measures in 2021 that focuses on the unprecedented economic circumstances brought about by the COVID-19 pandemic.

Pensioners

  • State Pension Qualifying Age to remain at age 66 from January – legislation to be implemented by end 2020.
  • €5 increase in the weekly Living Alone Allowance from €14 to €19 paid to people aged 66 and over who are living alone – over 221,000 pensioners, widows/widowers and people with disabilities to benefit.
  • Over 600,000 pensioners will benefit from the Christmas Bonus Double Payment.
  • Fuel Allowance will increase by €3.50 to €28.00 per week – over 375,000 households to benefit.
  • Island Allowance (paid to people living on certain offshore islands) to increase to €20 per week from January –an increase of €7.30 - first increase to the Island Allowance since it was introduced in 2000.
  • Grant of up to €500 will be paid for hearing aids without requiring it to be matched by the customer.
  • Hearing Aid repairs of up to €100 will no longer require matching funding by the customer.

Families and Children

  • Hot School Meals programme – Additional €5.5m for programme commencing in January 2021.
  • €5 increase for qualified child dependants aged 12 and over, in all weekly payments.
  • €2 increase for qualified child dependants up to age 12, in all weekly payments.
  • Parent’s Benefit increases to 5 weeks for parents of children born or adopted from November 2019 –an increase of 3 weeks.
  • €10 increase in the weekly income threshold for Working Family Payment for families with up to three children to help working parents on low incomes.
  • Working lone parents will no longer lose their One-Parent Family Payment when their employment income exceeds the current €425 limit. This limit of €425 will be removed from April 2021.
  • Newly widowed parents with dependent children will receive a grant of €8,000 from January 2021 – an increase of €2,000. 

People in Work

  • The number of ‘waiting days’ for Illness Benefit will reduce from 6 days to 3 days for all new claims from the end of February 2021.
  • Parent’s Benefit increases to 5 weeks for parents of children born or adopted from November 2019 – an increase of 3 weeks.
  • €10 increase in the weekly income threshold for Working Family Payment for families with up to three children - to help working parents on low incomes.
  • Working lone parents will no longer lose their One-Parent Family Payment when their employment income exceeds the current €425 limit. This limit of €425 will be removed from April 2021.

Carers and People with Disabilities

  • €5 increase for qualified child dependants aged 12 and over, in all weekly payments.
  • €2 increase for qualified child dependants up to age 12, in all weekly payments.
  • Fuel Allowance will increase by €3.50 to €28.00 per week – over 375,000 households to benefit.
  • Highest ever Carer’s Support Grant of €1,850 per year (increase of €150) to be paid in 2021 - to benefit over 130,000 carers.
  • €5 increase in the weekly Living Alone Allowance from €14 to €19 for people with disabilities who are living alone – over 221,000 to benefit.
  • Earnings disregard for people receiving Disability Allowance who are working to increase by €20 per week to €140. 
  • New €1,000 Training Grant to help people with disabilities who are seeking employment.

People who are unemployed or on PUP

  • A Christmas Bonus of 100% will be paid on an exceptional basis this year to recipients of the Pandemic Unemployment Payment and equivalent recipients of Jobseeker’s Payments who have been on these payments for four months or more.
  • Self-employed workers will be able to earn up to €480 a month gross and keep their Pandemic Unemployment Payment.
  • Funding for €1,000 COVID-19-Enterprise Support Grant doubled to €24 million.
  • The Part-Time Job Incentive scheme to be made available to the self-employed who intend to resume their business but can only do so intermittently or on a limited/reduced basis when they leave the PUP.
  • €10 million is being provided towards employment supports for people who are unemployed, with specific focus on youth unemployment. This is in addition to the €112 million provided in the July Stimulus package.

Christmas Bonus

A 100% Christmas Bonus will be paid in December 2020 to recipients of long-term Social Welfare payments (min €20 payment). People in receipt of the following payments will receive the Bonus:

  • State Pensions and Widow’s/Widower’s/Surviving Civil Partner’s Pensions
  • Invalidity Pension, Blind Pension, Disability Allowance, Carer’s Allowance, Carer’s Benefit, Partial Capacity Benefit, Disablement Benefit, Domiciliary Care Allowance and Guardian’s payments.
  • One-Parent Family Payment, Long-term Jobseeker’s Allowance, Jobseeker’s Transition Payment, Deserted Wife’s Benefit and Allowance and Farm Assist.
  • Back to Work Enterprise Allowance, Community Employment, Rural Social Scheme, TÚS, Gateway and Job Initiative, Supplementary Welfare Allowance, Daily Expenses Allowance, Magdalene Commission Scheme.
  • On an exceptional basis this year, recipients of the Pandemic Unemployment Payment and equivalent recipients of Jobseeker’s Payments who have been on these payments for four months or more.

€25.13 billion to be spent on Social Welfare in 2021

State Pension – Qualifying age to remain at 66 years

Fuel Allowance - an extra €3.50 in Fuel Allowance payment per week

Living Alone Allowance - €5 increase per week

Carers – Carer’s Support Grant to be increased by €150 to €1,850

Increases for Qualified Children - €5 weekly increase for children age 12 and over; - €2 weekly for children up to age 12

Illness Benefit – number of ‘waiting days’ will reduce from 6 days to 3 days

Parent’s Benefit – increases to 5 weeks for children born or adopted from 1 November 2019

Disability Allowance – earnings disregard will be increased by €20 per week to €140

People with disabilities – €1,000 grant to help people with disabilities to access employment

Hot School Meals programme – €5.5 million boost for programme extension in 2021

Working Family Payment threshold – €10 increase in weekly threshold (up to three children)

Working Lone Parents – income limit of €425 from employment to be removed

Widowed Parents - grant increases to €8,000 (up from €6,000) for recently bereaved partners

Island Allowance - increases from €12.70 to €20 per week

Employment Supports – additional €10 million in funding to help people get back to work with speci c focus on youth unemployment

Self-employed workers – can earn up to €480 a month and keep their Pandemic Unemployment Payment

Funding for €1,000 COVID-19 Enterprise Support Grant for self-employed - doubled from €12m to €24m

Christmas Bonus will be paid in early December 2020 – 15 month requirement reduced to 4 months for PUP and Jobseekers 

Improvements for Pensioners

  • State Pension Qualifying Age to remain at age 66 from January – legislation to be implemented by end 2020.

  • €5 increase in the weekly Living Alone Allowance from €14 to €19 paid to people aged 66 and over who are living alone – over 221,000 pensioners, widows/widowers and people with disabilities to bene t.

  • Over 600,000 pensioners will bene t from the Christmas Bonus Double Payment.

  • Fuel Allowance will increase by €3.50 to €28.00 per week – over 375,000 households to bene t.

  • Island Allowance (paid to people living on certain offshore islands) to increase to €20 per week from January – an increase of €7.30 - rst increase to the Island Allowance since it was introduced in 2000.

  • Grant of up to €500 will be paid for hearing aids without requiring it to be matched by the customer.

  • Hearing Aid repairs of up to €100 will no longer require matching funding by the customer.

Families and Children

  • Hot School Meals programme – Additional €5.5m for programme commencing in January 2021.

  • €5 increase for quali ed child dependants aged 12 and over, in all weekly payments.

  • €2 increase for quali ed child dependants up to age 12, in all weekly payments.

  • Parent’s Bene t increases to 5 weeks for parents of children born or adopted from November 2019 – an increase of 3 weeks.

  • €10 increase in the weekly income threshold for Working Family Payment for families with up to three children - to help working parents on low incomes.

  • Working lone parents will no longer lose their One-Parent Family Payment when their employment income exceeds the current €425 limit. This limit of €425 will be removed from April 2021.

  • Newly widowed parents with dependent children will receive a grant of €8,000 from January 2021 – an increase of €2,000.

Supports for People in Work

  • The number of ‘waiting days’ for Illness Bene t will reduce from 6 days to 3 days for all new claims from the end of February 2021.

  • Parent’s Bene t increases to 5 weeks for parents of children born or adopted from November 2019 – an increase of 3 weeks.

  • €10 increase in the weekly income threshold for Working Family Payment for families with up to three children - to help working parents on low incomes.

  • Working lone parents will no longer lose their One-Parent Family Payment when their employment income exceeds the current €425 limit. This limit of €425 will be removed from April 2021.

Supporting Carers and People with Disabilities

  • €5 increase for quali ed child dependants aged 12 and over, in all weekly payments.

  • €2 increase for quali ed child dependants up to age 12, in all weekly payments.

  • Fuel Allowance will increase by €3.50 to €28.00 per week – over 375,000 households to benefit.

  • Highest ever Carer’s Support Grant of €1,850 per year (increase of €150) to be paid in 2021 - to benefit over 130,000 carers.

  • €5 increase in the weekly Living Alone Allowance from €14 to €19 for people with disabilities who are living alone – over 221,000 to benefit.

  • Earnings disregard for people receiving Disability Allowance who are working to increase by €20 per week to €140. • New €1,000 Training Grant to help people with disabilities who are seeking employment.

Supports for People who are unemployed or on PUP

  • A Christmas Bonus of 100% will be paid on an exceptional basis this year to recipients of the Pandemic Unemployment Payment and equivalent recipients of Jobseeker’s Payments who have been on these payments for four months or more.

  • Self-employed workers will be able to earn up to €480 a month gross and keep their Pandemic Unemployment Payment.

  • Funding for €1,000 COVID-19-Enterprise Support Grant doubled to €24 million.

  • The Part-Time Job Incentive scheme to be made available to the self-employed who intend to resume their business but can only do so intermittently or on a limited/reduced basis when they leave the PUP.

  • €10 million is being provided towards employment supports for people who are unemployed, with speci c focus on youth unemployment. This is in addition to the €112 million provided in the July Stimulus package.

Christmas Bonus to be paid to 1.5 million people this year

€349.3 million to be paid to long-term welfare recipients in December 2020

A 100% Christmas Bonus will be paid in December 2020 to recipients of long-term Social Welfare payments (min €20 payment).

People in receipt of the following payments will receive the Bonus:

  • State Pensions and Widow’s/Widower’s/Surviving Civil Partner’s Pensions

  • Invalidity Pension, Blind Pension, Disability Allowance, Carer’s Allowance, Carer’s Bene t, Partial Capacity Bene t, Disablement Bene t, Domiciliary Care Allowance and Guardian’s payments.

  • One-Parent Family Payment, Long-term Jobseeker’s Allowance, Jobseeker’s Transition Payment, Deserted Wife’s Bene t and Allowance and Farm Assist.

  • Back to Work Enterprise Allowance, Community Employment, Rural Social Scheme, TÚS, Gateway and Job Initiative, Supplementary Welfare Allowance, Daily Expenses Allowance, Magdalene Commission Scheme.

  • On an exceptional basis this year, recipients of the Pandemic Unemployment Payment and equivalent recipients of Jobseeker’s Payments who have been on these payments for four months or more.

Summary of Budget 2021

Income Tax

No changes to income tax bands or rates in Budget 2021.  
Earned Income Tax Credit increased by €150 to €1,650.

USC 

The USC 4,5% threshold is to be increased in Jan 2021 from €20,484 to €20,687 This is to coincide with the minimum wage increase to €10.20 an hour. This change will prevent minimum wage earners from falling into this higher USC brcket. It will also result in a reduction in USC of €5 a year for everyone else earning over the minimum wage full time equivalent.

Help To Buy Scheme

The enhanced scheme is extended until the end of 2021.

Motor Tax

From Jan 2021 there will be a new set of Motor Tax rates for cars registered from the 1st of January 2021. These will take account of the introduction of the WLTP emissions test. (Worldwide Harmonised Light Vehicle Test Procedure ). Details soon.

There will be some increased rates for cars taxed on CO2 emissions (cars first registered in the State between July 2008 and end 2020). 
From Jan 2021 five of the tax bands will be increased.
The €390 rate will rise to €400.
€570 rate will increase to €600.
The rate of €750 will rise to €790 and €1200 will become €1250.
The maximum rate for cars taxed on CO2 emissions (first registered State between July 2008 and end 2020) will rise from €2350 to €2400

There are no changes to the motor tax rates for cars taxed based on engine size (pre July 2008).


Carbon Tax

An increase of €7.50 a tonne from €26 to €33.50 a tonne was confirmed. (This will continue to move towards €100 per tonne in 2030. )
This increase will apply to auto fuels from midnight 13th Oct . 
The increase will mean a €0.025 increase in the cost of a litre of diesel and €0.021 on a litre of petrol.
The increase will be applied to all other carbon-based fuels (coal , peat, kerosene,gas) from May 1st 2021. More on Carbon Tax 2020/2021

PRSI

Employers PRSI increased threshold from €394 to €398 .


Vehicle Registration Tax

The number of bands will rise from 11 at present to 20, applying to all new car sales from January 1st. Lower rates for lower emissions. The lowest VRT rate will drop from 14% to 7%. The top VRT rate will rise from 35% to 37%.

The VRT relief for hybrid (and plug-in hybrid) vehicles will expire on 31 December 2020

The €5,000 VRT relief for Battery Electric vehicles will be kept in full for vehicles with an Opem Market Selling Price below €40,000. Above €40,000, the relief will be reduced and there will be no relief for vehicles with an open market selling price over €50,000.

The charging structure for the NOx surcharge is also adjusted so that 1-40 mg are charged at €5 per mg, and 41-80 mg are charged at €15 per mg.

VAT


VAT rate for the tourism and hospitality sector will be reduced from 13.5 per cent to 9 per cent with effect from November 1st. The reduced rate will be in place until December 2021. VAT RATES 2020

Duty on Alcohol and Tobacco

The cost of a packet of cigarettes will rise to €14, with excise duty going up by 50 cents. Midnight 13th Oct
Alcohol – no change.


Pensions and Welfare Benefits

Fuel Allowance to increase by €3.50 a week to €28 a week from January 1st 2021

Living Alone Allowance increased by €5 a week to €19 from Jan 1st 2021

Carer’s Support Allowance increased by €150 a year (paid in June)

Dependent Child component of welfare benefits to increase. The Qualified Child Payment will be increased by €5 for over-12s and €2 for under-12s.
Consequently, the weekly payment for a qualified child aged 12 or over will increase from €40 to €45, while the payment for a child aged under 12 will increase from €36 to €38. All from Jan 1st 2021.

Working Family Payment income threshold increase by €10 a week for families with up to 3 children. No date was given.

One Parent Family Payment Earnings threshold of €425 removed from April 2021. This means that working lone parents will no longer lose their One-Parent Family Payment when their employment income exceeds the current €425 limit. 

Illness Benefit – the waiting period is reduced from six to three days so that people can be paid from their fourth day of illness.

Disability Allowance – the earnings disregard is increasing from €120 per week to €140 per week with effect from June 2021.

Extension of Parent’s Leave and Benefit  – by 3 weeks. It will be increased from 2 weeks to 5 weeks from April and it will apply in relation to all children born since November 2019. This payment is available to both parents.

Widowed or Surviving Civil Partner Grant – increased from €6,000 to €8,000.

Pandemic Unemployment Payment (PUP) . Self-employed people on PUP can recommence work and earn up to €480 per month while retaining their full PUP entitlement.

There will be a Christmas Bonus this year and it will also be paid to short term unemployed including most people on the Pandemic Unemployment Payment.


Students

There will be a new fund to provide one-off financial assistance to most full-time third level students, likely to be worth €250 to each student. This is to help with the move towards greater online learning. It will be provided to students who have paid the €3,000 student registration fee or who are in receipt of Susi grants.

The income thresholds for the Student Grant Scheme will increase. (Details to follow)

In addition, post-graduate fee grants will increase – with maximum payments rising from €2,000 to €3,500. The income threshold for eligibility for these grants will also rise, up from €31,500, now €54,240.


 

www.revenue.ie

Tuesday 13 October 2020

 

Click here for Budget 2020 information.