Posted on 16th October 2015 by Accountant

You will find below some most important changes in Irish Finance Budget 2016 which will effect majority of population in Ireland.
Department of Finance – Budget 2016 Leaflet in PDF 476 KB.
For more information and full list of changes please visit website of Irish Department of Finance here.

CHILDREN

Child Benefit will increase by €5 to €140 per month per child for 2016. Families with twins receive one and a half times the normal monthly rate for each child. Families with multiple births receive Child Benefit at double the normal monthly rate for each child.

Child Benefit
Number of Children 2016 Monthly Rate €
1 child 140
2 children 280
3 children 420
4 children 560
5 children 700
6 children 840

From September 2016, the Early Childhood Care and Education (ECCE) Scheme will be extended to children aged between 3 years and 5 years 6 months, or until they start primary school.

Extension of the free GP care to children under 12 years.

SOCIAL WELFARE

Pension rates will increase by €3 weekly and €3 weekly increase for carers aged 66 and over.

Fuel Allowance will increase to €22.50 per week for 2016. Fuel Allowance is paid to people getting long-term social welfare payments – including pensioners, people with disabilities, people parenting alone and jobseekers.

The name of the Respite Care Grant will be changed to the Carer’s Support Grant. Respite Care Grant in 2016 will be €1,700. In June 2016 the Department of Social Protection will pay the grant automatically to carers getting Carer’s Allowance, Carer’s Benefit, Domiciliary Care Allowance.

A 75% Christmas Bonus will be paid in December 2015 to people getting a long-term social welfare payment (minimum payment of €20).

A new Paternity Benefit is being introduced for fathers availing of the new 2 weeks’ statutory paternity leave. It will be paid at €230 per week in respect of births from September 2016.

EMPLOYEES

Minimum wage

The minimum wage will increase to €9.15 per hour from 1 January 2016. A single worker on the minimum wage will have a €708 more in yearly net income.

USC

Incomes less then €13,000/year are exempt from USC.

    USC rates for people with income more than €13,000/year:

  • 1% on all income up to  €12,012,
  • 3% on income from €12,013 to  €18,668,
  • 5.5% on income from €18,669 to €70,044,
  • 8% on any income from €70,045 to €100,000,
  • 11% on self employed earnings over €100,000

Medical card holders and people older than 70 years earning less than €60,000/year, will now pay a maximum rate of 3% USC.

Income Tax

An increase in the Home Carer Tax Credit from €810 to €1,000, and increase in the home carer’s income threshold from €5,080 to €7,200.

Employee’s PRSI

Introduction of a PRSI relief of a maximum of €12 per week for low paid workers earning between €18,304 and €22,048 per year.

BUSINESSES

Income Tax

Introduction of an Earned Income Credit of €550 for self-employed (trade and professions) and to business owner/managers who are not getting PAYE credit on their salary income.

Income tax credit worth up to €5,000 per annum for five years for certain farm partnerships

Employer’s PRSI

The lower 8.5% Class A rate of employer PRSI will apply to weekly earnings up to €376.

3 Year Relief for Start-up Companies

Relief from corporation tax on trading income is available for new start-up companies in the first 3 years of trading. This relief is available until the end of 2018.

Motor Tax

The rate of Motor Tax is being reduced for all vehicles above 4,000kgs, with a new annual rate of €500 for vehicle between 4,000kgs and 12,000kgs and €900 for vehicles over 12,000kgs.

OTHER

Tobacco Products Tax

You are paying 50 cent more for a packet of 20 cigarettes from 15th October 2015.

Local Property Tax (LPT)

Following a review of the Local Property Tax, it is proposed that the revaluation date for the Local Property Tax should be postponed from 2016 to 2019.