Dublin: Households across Ireland are awaiting the Government’s Budget 2027 announcement on October 6, with the focus expected to be on measures to ease pressure from the cost of living, energy bills and housing costs.
A range of proposals are reportedly being considered, with potential measures affecting low-paid workers, renters, pensioners, people with disabilities, carers and families with childcare costs.
However, the details remain under discussion, and none of the measures can be regarded as confirmed until the budget is formally announced.
Possible relief on home-heating oil
The sharp rise in oil prices following the conflict in the Middle East has increased pressure on households that depend on home-heating oil.
One option reportedly being examined is to avoid a further increase in carbon tax on home-heating oil. Such a move could save households around €40 on a 1,000-litre purchase next year.
The government is also considering whether temporary reductions in petrol and diesel taxes, which are due to be withdrawn in stages from November, should be extended if fuel prices remain elevated.
There is currently no indication that the universal electricity-bill credits introduced during previous cost-of-living measures will be restored.
Fuel allowance could reach more households
The weekly fuel allowance for eligible households is reportedly being considered for an increase from €38 to €43.
The government is also examining whether the income limits and other eligibility criteria could be widened, allowing more low-income households to qualify for support with winter heating costs.
Changes to the Living Alone Increase are also understood to be under consideration, although no specific increase has been confirmed.
Income tax and minimum wage
Changes to income-tax thresholds and credits could provide additional support for workers.
One proposal would increase the point at which income moves from the 20 per cent to the 40 per cent income tax rate from the current €44,000 threshold to €46,000.
The government could also increase personal or employment-related tax credits, providing further relief to workers.
At the same time, the Low Pay Commission has recommended an increase in the National Minimum Wage from €14.15 to €14.94 an hour. The Government must decide whether to implement the recommendation in full, while taking account of concerns raised by employers about the impact of higher labour costs.
Changes to USC thresholds could also be considered to prevent some lower-paid workers from moving into a higher rate as their earnings increase.
Childcare support could increase
Additional support for families using crèches and other registered childcare services is another measure under consideration.
An increase in the National Childcare Scheme subsidy could reduce the amount parents pay directly, although the size of any increase has not been finalised.
The government is also considering raising the annual income threshold for people providing registered childminding services in their own homes from €15,000 to €20,000.
The change could make the formal childminding system more attractive to prospective providers and potentially increase the availability of childcare places.
Rent Tax Credit increase under consideration
Renters could also receive additional tax relief.
The current Rent Tax Credit is worth up to €1,000 a year for an individual and €2,000 for a jointly assessed couple for the 2024–2028 tax years.
Government leaders have indicated that an increase is being considered, with figures in the region of €200 to €300 reportedly discussed.
Another proposal could increase the amount of tax-free income available to people who rent out a room in their homes, with the aim of encouraging more homeowners to make rooms available to tenants.
Additional support for carers and welfare recipients
The government has previously committed to phasing out the means test for Carer’s Allowance. The budget could include a further step towards that objective, although a complete removal of the means test is not guaranteed.
The income threshold applying to people receiving Carer’s Allowance could also be increased.
Basic weekly rates for a range of social welfare payments, including pensions, Disability Allowance, Carer’s Allowance, Jobseeker’s Allowance and the One-Parent Family Payment, are also expected to come under consideration.
The increase being discussed is reportedly around €7.50 a week, compared with the €10 increase provided in the previous budget.
Possible annual payment for people with disabilities
A new annual payment aimed at helping people with disabilities meet additional living costs is also reportedly being considered.
The details have yet to be established, including the amount of the payment, who would qualify and whether eligibility would depend on a means test.
If introduced, it would provide additional support alongside existing disability-related welfare payments.
Culture Card for teenagers
A proposed €100 Culture Card for 16-year-olds is also among the measures being discussed.
The digital card could be used for activities such as cinema, theatre and music events, with the aim of encouraging young people to participate in arts and cultural activities.
However, it remains unclear whether the proposal will form part of the final budget package.
Possible changes to inheritance tax
The budget discussions are also expected to include proposals relating to inheritance-tax thresholds.
One option being examined is a change to the tax-free thresholds applying to inherited assets, although the details of any proposed change have yet to be confirmed.
New investment account
The government may also provide further details of a proposed investment account designed to make it easier for individuals to invest in assets such as shares and bonds.
Under the proposal, investments could be held in a tax-advantaged account up to a specified limit, with a one per cent annual tax potentially applying to amounts above that threshold.
The tax-free limit, annual investment ceiling and proposed start date have not yet been confirmed.
Such an account would not provide a guaranteed return. The value of investments can rise or fall depending on market performance.
Possible support for home solar batteries
Households with solar panels could also receive additional support if a proposed grant of around €600 for home battery storage is included in the Budget.
Battery storage allows households to store electricity generated by solar panels and use it when the panels are not producing electricity.
With battery systems costing several thousand euro in many cases, the final grant amount and eligibility conditions would determine how much assistance households could receive.
Budget decisions still to come
The wide range of measures under discussion means Budget 2027 could affect households in very different ways depending on their income, family circumstances, housing situation and access to social welfare supports.
However, the proposals remain subject to government decisions and available funding.
The budget announcement on October 6 is expected to provide clarity on which tax changes, rental supports, childcare measures, energy assistance and welfare increases will actually be introduced.
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