Budget 2022 – key points

The Finance Minister says he has worked with others to ensure Budget 2022 is a path to a better, brighter future.

The post Covid pandemic outlook has dominated Minister Paschal Donohoe’s Budget speech this afternoon. He says the budget deficit from Covid-19 is forecast to be €21.5 billion, down from €34.5 billion.

In delivering the Budget, Minister Donohoe says the Government is conscious of the cost of living.

Public spending next year will be €87.6 billion with national debt to come in at just under €240 billion.

The total budget package is €4.7 billion euro which will be split between expenditure measures worth €4.2 billion and €0.5 billion in tax measures.

The Finance Minister expects employment will return to pre-pandemic levels in 2022 with the unemployment rate forecast to drop to 6.5%.

Paschal Donohoe has set out what Budget 2022 contains for the people of Ireland. This includes;

• • • • A €4 billion Covid contingency fund is being created
      • The Employment Wage Subsidy Scheme is being extended in graduated form until April 30th 2022
      • Tax arrangements for international air crews under Section 127B of income tax code will change
      • Reduced VAT rate of 9% for the hospitality sector will remain in place until August 2022
      • Employees working from home will be able to claim back 30% of vouched expenses for heat, electricity and broadband
      • A €520 million tax package means the rate at which people pay the higher rate of tax will increase by €1,500 and personal tax credit, employee tax credit and earned income credit will increase by €50
        The minimum wage is rising by 30c to €10.50 an hour
      • The ceiling for the second band of USC is rising to €21,295 while the USC exemption for medical card holders and those over 70 earning less than €60,000 stays in place
      • A Zoned Land Tax will be introduced applying to land which is zoned for housing and serviced but is not being developed. There will be a 2 year lead in time for land zoned before January 2022 and three years for land zoned after January 2022. The rate will be 3% of the market rate. It will operate on a self assessment basis, have exemptions and will replace the vacant sites levy.
      • The Help to Buy scheme will be retained for 2022 at the current rates and reviewed next year.
      • Three year extension to pre-letting expenses relief for landlords.
      • 7.50 increase in the carbon tax which will be reinvested in social welfare measures on fuel poverty and a just transition.
      • Modest tax disregard for personal income to households who sell surplus electricity from microgeneration back to the grid.
      • A revised motor tax system: 1% increase in VRT for bands 9-12, 2% increase for bands 13-15, 4% increase for bands 16-20.
      • Extension of €5,000 relief for Battery Electric Vehicles to end of 2023.
      • Fossil fuel equipment will no longer apply for Accelerated Capital Allowance, aims to support transition to lower emission fuels in heavy duty land transport. Scheme is extended for gas vehicles and hydrogen powered ones.
      • Various farming stock relief to continue – general stock relief will continue until the end of 2024 and relief for young trained farmers is to continue.
      • Finance Minister has signaled that next year’s budget will contain a 50% excise relief for independent small producers of cider and other fermented drinks.
      • Employment Investment Incentive scheme is to be extended for three years and will be opened up to more investment funds.
      • There will be a relaxation of the rules around the capital investment window for investors and the 30% expenditure rule has been removed.
      • Innovation Equity Fund to receive a further €30 million – matched by €30 million from the European Investment Bank. Due to launch early 2022.
      • Extension of Corporate Tax relief to certain start ups until end of 2026.
      • New tax credit for the digital gaming sector of 32% up to a limit of €25 million on the design, production and testing of a game.
      • Excise on a 20 pack of cigarettes going up 50c with a pro rata on other tobacco products. Price of most popular cigarettes now €15 euro.
      • The bank levy is being extended. Ulster Bank and KBC will be excluded from the charge as they’re leaving the market. Expected yield of €87 million.
      • Proposals on a pandemic bonus to be brought forward in the coming weeks.
      • Recovery funding of €286 million euro. Includes; €90m aviation package, €30m for protection and renewal of roads, €50m in ICT grants for schools, €60m for extension of commercial rates waiver for Q4 targeted at hospitality, arts and tourism and €30m for health for areas hit hard by pandemic – palliative, mental and disability.
      • €20 billion over the next five years being made available for housing. €6 billion next year to housing, up 15.6% on 2021. €174 million for direct delivery of 4,000 affordable homes next year.
      • €1.6 billion being invested in water services next year.
      • Minister for Public Expenditure and Reform Michael McGrath says the Government acknowledges the plight of thousands of homeowners affected by Mica but has given no commitment other than a new Mica redress scheme will be announced in coming weeks.
      • €1 billion for the health service in 2022 for Covid health measures. €200 million of that will be held in a central contingency fund and includes €500m for testing and tracing, vaccine booster campaign and PPE
      • Core health spending is to increase by €1 billion to a record €20.38 billion.
      • €10.5 million for 19 extra ICU beds in 2022 bringing, a rise of 33% since start of pandemic.
      • €250 million fund to tackle waiting lists.
      • Extension of free GP care to children aged 6 and 7.
      • Lowering of drug payment scheme threshold to €100.
      • Improvement to dental access.
      • Measures to reduce cost of hospital charges for children.
      • €30 million for new drugs.
      • Women’s Health package of €31 million. Includes; free contraception for women aged 17-25 from next August and progress on period poverty.
      • €105 million for disability services.
      • €37 million for expansion of mental health services.
      • €30 million for national strategies including Cancer Strategy.
      • 8,000 new posts across the health system.
      • €716 million investment in childcare in 2022. €78 million extra for National Childcare Scheme. Linked to no increases in costs for parents.
      • €28 million for ending direct provision in line with white paper.
      • €700 million for capital spending by Climate Department.
      • €202 million for home retrofitting, supporting 22,000 energy upgrades.
      • More funding for apprenticeships particularly in construction.
      • €11.1 billion in 2022 for the National Development Plan.
      • €3.4 billion for transport.
      • €1.4 billion to develop public transport including BusConnects, MetroLink and DART+.
      • €25 million for a new youth travel card. Anyone aged 19-23 will receive a 50% discount on public transport.
      • €360 million for active travel and greenways.
      • €60 million for aviation for a number of capital and grant schemes.
      • €108 million for maritime funding.
      • €9.2 billion for Education including the hiring of 980 teachers and 1,165 new SNAs.
      • €30 million for school transport.
      • 350 additional teacher posts to reduce class sizes by 1.
      • €18 million to increase the number of DEIS schools.
      • €4 million to increase the allocation of hot school meals.
      • 3,320 additional CAO places as part of a €68 million investment in higher education – €35 million for the cost of going to college.
      • The SUSI grant will be increased by €200 and changes to who can get it.
      • €200 fee for post leaving cert courses will be scrapped.
      • €558 million social protection package – €5 a week for working age welfare payments including €5 euro for young job seekers.
      • Increase in Qualified Children rate for u12s by €2 and over 12s by €3.
      • €5 a week increase in state pension.
      • €3 euro a week increase to living alone allowance.
      • Parents benefit increase by 2 weeks to 7 weeks from July next year.
      • €10 on the back to school allowance.
      • €10 on the working family payment.
      • Domiciliary Care Allowance increased from 3 to 6 months.
      • Rate of wage subsidy scheme for disabilities will rise by €1 a week.
      • Increase in income disregard for carers allowance. Earnings limit on disability allowance from €350 to €375.
      • Reducing the number of contributions for treatment benefits from 260 to 39 week.
      • 100% Christmas bonus to be announced.
      • Fuel allowance increasing by €5 a week.
      • €34 million for apprenticeship places.
      • 20,000 further education and training places.
      • €50 million for business continuity supports.
      • €39 million for enhanced marketing and product development.
      • Pilot basic income guarantee scheme.
      • €25 million for the continuation of live entertainment supports.
      • Doubling of the ex-gratia funding for animal welfare organisations as part of €1.85 billion programme for the Department of Agriculture, Food and the Marine.
      • €376 million programme for rural Ireland including €4 million for the SICAP programme.
      • €5 million for new small capital grant scheme for community centre upgrades.
      • 800 new Gardai and 400 Garda civilian staff in 2022.
      • €6.7 million for a youth justice strategy to tackle anti-social behaviour.
      • Package on domestic and sexual violence including extension of legal aid for victims and funding awareness campaigns.
      • €50 million for the Shared Island Fund projects.
      • €69 million for Foreign Affairs Department with focus on Brexit, enhancing global presence and online passport service.