Budget 2023: €15 welfare hikes and €400 tax credit for renters at center of last minute budget talks

Demands for a €400 tax credit for renters and a €15 increase on welfare rates are the main bones of contention as Coalition leaders seek to agree the final details of the Budget.

ianna Fáil is pushing for a €400 tax credit for renters while Fine Gael wants welfare rates increased by €15 per week.

Meanwhile, the Green Party is pushing for a significant childcare package which will reduce fees for parents.

The three Coalition leader – Micheál Martin, Leo Varadkar and Eamon Ryan – are meeting with Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath in Government Buildings to iron out a number of issues ahead of Tuesday’s Budget.

Housing Minister Darragh O’Brien has been seeking the introduction of a tax credit to help renters while also easing the tax burden on landlords. There is a debate about whether the tax credit should be €200 or €400 a year for renters with Government sources suggesting the latter would be more palatable to voters.

It is unclear if landlords will be given a significant tax break at this point. The leaders are examining whether tax relief on pre-letting expenses could be extended.

Social Protection Minister Heather Humphreys has been pushing for a €15 hike in welfare rates but is encountering resistance from Mr McGrath who is warning there are other areas that need to be taken into consideration.

Mr McGrath is pointing towards the once-off cost of living package which could reach €3bn and include a range of double welfare payments including child benefit in his negotiations. However, Ms Humphreys insisted €15 a week is needed to support pensioners, carers and people with disabilities.

One senior Fine Gael source said Fianna Fáil are putting too much emphasis on the one-off spending measures. The Green Party are also said to be frustrated with this approach.

The leaders are expected to make a final decision on what can be spent on new tax credits and welfare in the coming hours.

Agreement has been reached on increasing the 40pc income tax band by €2,500, meaning workers will not have to pay the higher rate on any earnings below €39,300.

The move will lead to significant savings for taxpayers – with a single person earning €50,000 taking home at least an extra €500 a year under the plan agreed by the Coalition parties.

Excise duty cuts on petrol and diesel are set to be extend while Vat cuts on energy bills will also continue to remain in place for the coming months.

Electricity credits of up to €600 are set to be taken off bills over the coming months in either two or three installations.

There is still confusion about a scheme to support businesses struggling with energy costs will work.

The Green Party are also believed to have secured the extension of the reductions of public transport fees. However, a government source said they have not secured any further reductions they had been looking for.

Arts Minister Catherine Martin secured €6m to start a new media funding scheme that will prioritise local democracy and court reporting initially, supporting local, national print and broadcasting.

A new Media Development Commissioner (one of three under the new Media Commission) to oversee funding and development in the sector will also be selected by November. Ms Martin has also been strongly supportive of reducing VAT for print media to zero, advocating for this to Cabinet colleagues since July after her Future of Media Commission report recommended so.

The ministers also secured funding to support artist studios and spaces, the Night Time Economy, and ‘Speak Up’ funds for a growing, safe and fair environment in the Arts. This will include soundproofing grants will also help nightclub and night venue plans.

Ms Martin also got agreed for extra tourism funding to support domestic marketing for the sector, sustainable tourism, festival enhancements, a property register of short term lettings, hosting of the US College Football Classic and further digital enhancement for visitor attractions.

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