The 2022 Budget details were announced in the Dail by the Minister for Finance on 12th October 2021. We look at the main changes potentially impacting on clients.
The key points from the Budget 2022 speech
- Income tax bands increased by €1,500 and main tax credits by €50.
- The 2% USC band increased from €8,675 to €9,283.
- Employees working at home will be able to claim tax relief on 30% of vouched home electricity, heating and broadband expenses for days spent working from home.
- State Pension & Social Welfare rates – an increase of €5pw in most benefits and pensions
- The Help to Buy Scheme will be extended to end of 2022, providing a tax refund of up to€30,000 in certain circumstances, but its operation will be fully reviewed during 2022.
- Carbon Tax increases will result in the price of Petrol, Diesel, Home Heating Oil, Gas and Coal increase by an average of 2.15%
- Free GP Care extended to 6&7 year old children
- The threshold for the Drug Payment Scheme is reduced to €100 from €114
- Waiting Lists are to be addressed by an allocation of €250m
- Children with Special Needs are going to get some needed support with the addition of 1165 more SNA’s
- EWSS will continue until April 2022 – this means employers have continued state support to get their staff back to work
What does it mean in our pockets? The average 20% taxpayer will be €2 better off per week and the 40% Taxpayer will be €8 better off per week in their paychecks. This however will be more than absorbed by inflation and increases in fuel and heating costs.
Inflation outlook is a bit grim for the short term so we recommend that our clients seek our advice to protect the buying power of their deposits and current savings; otherwise, it will be eroded.
Could we have hoped for more? Unlikely – the country is still looking at a serious deficit in spending. The priority is to get people back to work to reduce the drain in the welfare of PUP payments. The recent increase in COVID cases is still worrying so we are not through the woods yet.
Stay Safe.
Joe Carroll QFA, FPC
joe@clevermoney.ie
For more information like this please visite: https://clevermoney.ie
