Budget 2013 – consumers take another major hit!

Following on its promise to deliver another tough Budget, this Government did not disappoint.

Prudence again took a hit. Tax on savings has risen, pensions have been targeted, education will cost more as will owning a home and all of this is taking place while as many as 1.8 Million citizens already struggle with less than €€100 remaining after essential bills are paid.

On the flip side, drinking alcahol and smoking will cost only marginally more…it would appear that this Government at least does not want its citizens to drop unhealthy habits…especially if doing so could jeopardise the tax take.

Following is a summary of where this latest Budget impacts:

·  Back-to-School Clothing and Footwear Allowance to be reduced by €50

  • Respite Care Grant to be reduced by €325, from €1,700 to €1,375 per annum
  • No increase on excise duty on diesel and petrol
  • Excise duty on a pint of beer or cider will increase by 10 cent, on a standard measure of spirits by 10 cent, and on a 75cl bottle of wine by €1
  • DIRT will increase from 30% to 33% (Battle against savers).
  • Capital Acquisitions Tax and Capital Gains Tax to increase from 30% to 33%. The threshold at which CAT applies will be reduced by 10%.
  • From midnight, the price of 20 cigarettes rises by 10 cent, while roll your own tobacco rises by 50 cent per 25g pack
  • Student contribution in higher education will be increased by €250 in each of the years 2013, 2014, 2015
  • Allocation to VECs to be reduced by €13m in 2013
  • People 70+ with income of €600-€700 p/wk for single person and €1,200-€1,400 p/wk for couple will have their medical card replaced with a GP-only card
  • Drug Payment Scheme threshold is being increased from €132 to €144 per month.
  • Prescription charge for medical card holders to be increased to €1.50 per item, and monthly cap for a family is being increased from €10 to €19.50
  • Child benefit rate to be reduced by €10 per month
  • Primary weekly rate of social welfare payment will not be reduced. Duration of Jobseeker’s Benefit to be reduced by three months to save €33m in 2013 and €82m in a full year
  • €11m in 2013 and €26m in a full year given to increase number of placements available in ‘labour market activation schemes’
  • Enterprise Ireland allocated €139m to support indigenous Irish exporters in 2013
  • Government to maintain the 12.5% Corporation Tax rate
  • From 1 July 2013, Maternity Benefit will be treated as taxable income, but will continue to be exempt from the USC
  • Any Household Charge arrears that have not been paid by July 2013 will be increased to 200 and collected through Local Property Tax system
  • Property tax payable on 0.18% market value of the property up to €1m. 0.25% on balance of property value over €1m
  • Three-year exemption of Property Tax for first-time buyers, and people buying new or previously unoccupied homes
  • Voluntary deferral available for those whose income do not exceed €15,000 for single person, €25,000 for couple
  • Some people will be able to defer payment of the Property Tax, subject to 4% interest
  • Property tax to take effect from July 2013 for the second half of the year
  • No change to current rates of income taxtogether with bands and credits
  • Employees to pay more PRSI – Increase to the minimum level of annual contribution from the self-employed from €253 to €500.

Weekly allowance for employees of €127 abolished. This will cost €264 a year.

  • The reduced rate of USC for over 70s with an income over €60,000 will be discontinued in 2013
  • Pension levy to be abolished in 2014
  • Tax relief will end for pension schemes providing over €60,000 a year from 2014
  • Central Bank overseeing the rollout of a range of options to deal with unsustainable personal and commercial debt
  • Mortgage Interest Relief to end on 31 December
  • VAT rate of 9% to be continued in 2013
  • Relief from Capital Gains Tax arising on disposals of farm land for farm restricting purposes
  • Some people will be able to defer payment of the Property Tax, subject to 4% interest. Three-year exemption of Property Tax for first-time buyers, and people buying new or previously unoccupied homes

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