Budget 2027: Tax Relief, Welfare Increases and Childcare Support Announced for Irish Families
Dublin: Ireland’s Budget 2027 has introduced a range of tax reliefs and welfare measures aimed at supporting families facing continued cost-of-living pressures.
Tánaiste and Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers presented the Budget to the Dáil on October 6, with measures focused on workers, families with children, pensioners, renters and people with disabilities.
A €1.3 billion package of personal income tax measures was announced as part of the budget.
Record health allocation and additional disability staff
The budget provides a record allocation for the health sector, alongside additional resources for disability services.
A further 930 staff will be recruited to strengthen disability services and provide additional support for people with disabilities.
Minimum wage to rise to €14.94 per hour
The national minimum wage will increase from €14.15 to €14.94 per hour from January 1, 2027.
The 79-cent increase will provide an additional boost to workers on the lowest wages, while changes to the tax system will also provide further relief for low-income earners.
Pensions and welfare payments to increase by €10
Core weekly social welfare payments, including the State pension, will increase by €10 from the beginning of next year.
The increase will provide recipients with an additional €520 over a full year.
Eligible people receiving long-term social welfare payments will also receive a Christmas bonus equivalent to 100 per cent of their normal weekly payment.
A new €500 lump-sum payment will also be provided to people receiving certain long-term disability payments.
Additional support for working families
The income threshold for the Working Family Payment will increase by €30 per week, allowing more families to qualify for the support.
The Child Support Payment for eligible children will increase by €6 per week.
The Living Alone Allowance will also rise by €3 per week for eligible people who live alone.
Childcare fees to fall to €550
One of the key measures for families is a reduction in the maximum monthly childcare fee covered under the relevant scheme.
The maximum monthly fee will fall from €735 to €550 for eligible childcare services.
The measure, which will apply to children up to senior infants, will take effect from September 2027.
Families could save up to €2,220 per child over a full year as a result of the reduction.
Rent tax credit and housing support increased
The Rent Tax Credit will increase from €1,000 to €1,150 for individual renters and from €2,000 to €2,300 for jointly assessed couples.
The maximum amount available to first-time buyers under the Help-to-Buy scheme will also increase from €30,000 to €35,000.
The tax-free limit under the Rent-a-Room scheme, which allows homeowners to earn income by renting out a room in their home, will increase from €14,000 to €16,000.
Relief on home heating costs
The carbon tax on home heating oil and natural gas will be reduced to €48.50 per tonne.
The government has said the lower rate will be maintained for the remainder of its term, providing some certainty for households facing high energy costs.
The weekly fuel allowance will increase by €5, bringing the payment to €43 per week.
The income threshold for qualifying for the allowance will also be increased, allowing more households to benefit.
College fees to fall and additional support for schools
The annual student contribution charge for third-level education will be reduced by €150, bringing it to €2,350.
The SUSI student grant will also increase by 4.5 per cent.
The budget includes additional funding to recruit 2,339 special needs assistants and 1,353 teachers to support children with special educational needs.
Additional funding for healthcare and transport
The government will provide funding for an additional 1.8 million home-support hours, allowing more elderly people to receive care in their own homes.
Additional funding will also support the recruitment of 930 staff for disability services.
A further €6 billion will be allocated to the Dublin Metro project between 2027 and 2030.
The budget also provides €3 billion for social housing construction.
Cigarette and vape prices to increase
The price of tobacco and vaping products will also rise under the budget.
Excise duty on a packet of 20 cigarettes will increase by €1.
The excise duty on vape liquid will rise by 20 cents per millilitre.
At the same time, the government has decided to extend the Vehicle Registration Tax (VRT) exemption for electric vehicles until the end of 2028.
Opposition raises concerns over spending
The government has described Budget 2027 as a package designed to ease financial pressure on households while supporting investment in public services.
Opposition parties, however, have criticised the measures as insufficient to address the scale of the cost-of-living pressures facing families.
The Irish Fiscal Advisory Council has also raised concerns about the sustainability of increasing permanent state spending while relying heavily on corporation tax revenues, particularly those generated by a relatively small number of multinational companies.
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