Dublin: Significant economic and social policy adjustments will take effect in Ireland from January 1, 2025, impacting various aspects of daily life, including wages, taxes, social welfare, and fuel allowances. These changes are aimed at addressing the cost of living and providing relief to citizens across different demographics.
Key Economic Changes
Minimum Wage Increase
- The national minimum wage will rise by €0.80, reaching €13.50 per hour.
Universal Social Charge (USC)
- The USC rate for incomes between €25,000 and €70,000 will decrease from 4% to 3%.
- The entry point for the reduced USC rate will increase to €1,622 per month, aligning with the national minimum wage adjustment.
VAT Registration Threshold
- The VAT registration threshold will increase to €85,000 for goods and €42,500 for services.
Retirement Relief
- The upper age limit for retirement relief will increase from 65 to 70.
- Clawback provisions will apply if assets valued at more than €10 million are sold within 12 years.
- Capital gains tax (CGT) will be fully exempt for assets held for over 12 years.
Social Welfare Increases
Weekly Payments
All core weekly social welfare payments will increase by €12, benefiting recipients of the following:
- Contributory and Non-Contributory State Pensions
- Jobseeker’s Benefit and Allowance
- Disability, Invalidity, and Blind Pensions
- Carer’s Allowance and Benefit
- One-Parent Family Payment
- Supplementary Welfare Allowance
- Illness and Death Benefits
Specialised Benefits
- Maternity, Adoptive, and Paternity/Parent’s Benefits: Increased by €15 per week.
- Qualified Child Support Payment:
- For children under 12 years: Increase from €46 to €50 per week.
- For children aged 12 and over: Increase from €54 to €62 per week.
- Domiciliary Care Allowance: Monthly allowance rises from €340 to €360.
- Carer’s Support Grant: Annual grant increases from €1,850 to €2,000.
Working Family Payment
Income thresholds for eligibility have been adjusted:
- One child: From €645 to €705 per week.
- Two children: From €746 to €806 per week.
- Three children: From €847 to €907 per week.
- Four children: From €938 to €998 per week.
Fuel Allowance Adjustments
- The allowance will increase to €524 for single individuals and €1,048 for couples.
- Individuals aged 66 and over will qualify regardless of means testing.
- Carer’s Allowance will now count as a qualifying payment for the fuel allowance.
Employment Programme Payments
- Participants in community employment schemes, TÚS, and the Rural Social Scheme will receive a €12 weekly pay increase.
- Those on the Work Placement Experience Programme will see a €24 weekly increase.
Tax Adjustments
Income Tax and Credits
- The top tax bracket threshold will increase from €42,000 to €44,000.
- Personal and employee tax credits will rise by €125 each.
Non-Cash Benefits
- Non-cash vouchers between €1,000 and €1,500 will now be tax-free.
- The number of tax-free non-cash benefits will increase from two to five annually.
Means Testing
- For non-contributory pensions, Disability Allowance, and Blind Pension recipients, the exempt amount from home sales when moving into care will increase from €190,500 to €337,500.
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