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Budget 2019 set to focus on housing, health and social welfare

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It’s Budget day, with the Government to announce spending for next year in the Dáil this lunchtime.

It will be a mix of modest tax cuts and increased spending with a focus on housing, health and social welfare.

Here’s what’s likely to come in Budget 2019.

Childcare

There will be an extra €90 million put into affordable childcare.

It will mean families with a net income of €60,000 will be eligible for the Affordable Childcare Scheme – a rise from the current threshold of €47,500.

Changes to the thresholds will start in the latter part of next year and will mean around 16,000 more children will be eligible for subsidies.

Two weeks extra parental leave for both mothers and fathers is expected to be introduced next year.

Social Welfare

A €5 a week increase across the board for social welfare payments.

This is likely to apply to state pension payments as well.

The Christmas bonus is also to be fully restored after being brought to 85% of what it was last year.

The Government has said this will be the Budget that reverses all the social welfare cuts made during austerity.

The self employed will also likely be given access to social welfare payments from next year.

Housing

There’s likely to be an affordable housing scheme announced to the tune of €300 million over three years.

It will aim to significantly reduce building costs on sites in order to provide a significant number of affordable homes.

There may be a ‘granny flat grant’ scheme to encourage older people to renovate their homes to provide more accommodation.

There’s also likely to be tax breaks for landlords through mortgage interest relief on rental properties and capital gains tax relief.

Income Tax

The 4.75% rate of USC will be cut to 4.5%.

This is likely to effect around 1 million workers earning between €19,372 and €70,044.

The entry point for paying the higher 40% rate of income tax will rise by €750 to €35,300.

Those two changes will be worth around €5 a week to the average worker.

The home carer’s tax credit is expected to rise by €300.

Health

Prescription charges for medical card holders will likely drop by 50c to €1.50 an item.

The fair deal scheme for farmers and small businesses will likely be overhauled while there will be more money allocated to the National Treatment Purchase Fund.

Carbon Tax

This one has been tricky for the Government, with some rural TDs worried about the effect it will have on constituents.

The plan was to raise the carbon tax by 50% – from €20 a tonne to €30 a tonne.

This would lead to a 3 or 4 cent increase on a litre of petrol or diesel, and raising the cost of a bag of coal by a euro.

The plan was to use it as part of a carrot and stick approach with eco-grants to move people towards electric cars and cleaner home heating.

However, the final increase may be less than planned after push back from Government TDs.

The excise duty on diesel may also rise in the Budget, bringing it closer to the cost of petrol.

VAT rates

The special 9% VAT rate for the tourism sector is likely to end and be increased to 13.5%.

Some sectors however will be exempt from this.

The measure was included despite resistance from the Independent Alliance.

Cigarettes and Alcohol

A pack of 20 cigarettes is going to get 50c more expensive.

Alcohol may escape untouched because of the increase in the VAT rate for bars and restaurants but don’t be too surprised if a pint becomes more expensive today.