Factsheet for measure
IE-2022-40/2956
– measures in Ireland
Social welfare and taxation measures to address cost of living crisis
Background information
Budget 2023 took place against a background of strong expected economic growth of 10% in 2022. This growth was driven mainly by the multinational sector. According to the government, growth is expected to continue in 2023, with the economy expected to expand by 4.7%. In addition, there are more people employed in Ireland than ever before. It is expected that over 2.5 million people will be employed in 2023.
In 2022, it is projected that there will be a general government surplus of €970 million in 2022 and a surplus of €6.17 billion in 2023.
The budget also took place against a background of high inflation and calls for the government to intervene in the cost of living crisis.
Content of measure
A number of cost of living initiatives were announced in Budget 2023. Key measures targeted social welfare and taxation as follows:
Social Welfare
Most people receiving a weekly social welfare payment (for example, jobseeker payment, disability payment, state pension) will get a single payment as cost-of-living support. It will be paid in October 2022.
There will also be a double payment of Child Benefit (monthly universal payment to parents), a single payment of €200 to people getting the Living Alone Increase, a single payment of €400 to people getting the Fuel Allowance, a single payment of €500 to people getting the Working Family Payment, a €500 lump sum for carers, a €500 lump sum for people in receipt of Disability payments and a €20 increase in the Domiciliary Care Allowance for sick children.
Weekly social welfare rates will be increased by €12 for working age recipients and there will also be a €12 increase in weekly payments for pensioners.
Taxation
Income tax rates will stay the same (at 20% and 40%), but there will be increases to tax credits and changes to the income tax bands in 2023. The standard rate income tax band (the amount you can earn before you start to pay the higher rate of tax) will be increased by €3,200. There will be a €75 increase in certain tax credits and the home Carer Tax Credit will increase by €100 to €1,700.
Use of measure
No available information.
Target groups
Actors and funding
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Actors
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Funding
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National government
Local / regional government
Public employment service
Public support service providers
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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No involvement
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No involvement
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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No involvement
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Main level of involvement: N/A
Involvement
Social partners made pre-Budget submissions and lobbied to have certain initiatives included. They have no direct involvement in designing, implementing or monitoring.
Views and reactions
The Irish Congress of Trade Unions criticised the taxation measures. ICTU General Secretary Patricia King said; “the €3,200 (8.7%) increase in the standard rate cut off point is in line with inflation. The one million income earners who receive too little to pay tax and the vast majority of the 1.2 million who pay at the standard rate will not benefit from this measure, which will disproportionately accrue to the better off. This measure, which costs almost three-quarters of a billion, should have been accompanied by additional revenue-raising measures from higher earners. These measures are not targeted at those who need them most.”
Danny McCoy, CEO of Ibec (the group represents business) said: “The announcement of an increase in the entry point to the top rate of tax is a sensible measure that will help workers struggling with cost-of-living challenges."
Sources
