herald

Wednesday 7 December 2016

Bonus for pensioners as price of medicine set to be cut in the Budget

Minister Michael Noonan
Minister Michael Noonan

The old age pension will increase by €5 from March after a last-minute deal between Fine Gael and Fianna Fail that will allow today's Budget pass through the Dail.

There will also be an unexpected boost for the over 70s after Fine Gael gave in to demands from the Independent Alliance to reduce the price of medicine.

OAPs will see their prescription charges reduced by €5 a month, meaning they will pay a maximum of €20.

Dispute

Talks were ongoing late last night to try to resolve a dispute over when a series of welfare increases for carers, the disabled, the blind, widows, guardians of orphans and people on invalidity and illness benefits will be introduced.

Sources said they expected the issue to be resolved in plenty of time for Finance Minister Michael Noonan to begin his sixth Budget speech at 1pm.

All workers will benefit from cuts to the Universal Social Charge, which will apply to income up to €70,000.

The three lowest rates of USC will be cut by 0.5pc each, meaning a worker on €50,000 stands to gain €5 a week.

The minimum wage is to be increased by 10c to €9.25 and these workers will also be exempted from USC.

Cigarettes are set to increase by 30c but there will be no change to the other 'old reliables' - petrol, diesel and alcohol.

A first-time buyers' tax rebate will be made available to people looking to purchase a newly-built home.

The maximum rebate available will be €20,000.

A new childcare subsidy will be made available to families with a combined gross income of under €80,000.

Mental Health Minister Helen McEntee is to get €35m for initiatives, although not all of this will be allocated for spending in 2017.

She will also get a significant capital budget which will include funding for the redevelopment of St Ita's Hospital in Portrane.

Ahead of the Budget, Mr Noonan said: "There is some money to spend, which there hasn't been in previous budgets.

"We have decided the resources available will be divided on at least a 2:1 basis, between tax reductions and increased expenditure - in favour of public expenditure. There'll be quite significant increases in public expenditure."

He added that there will be tax reductions for low-paid and middle-income earners.

"There'll be extra money for health and education, for law and order on the streets, and for childcare," the minister added.

"These are issues the 'squeezed middle' are very interested in as well.

Challenges

"So the big benefits will be on the expenditure side, rather than on the tax side."

Public Expenditure Minister Paschal Donohoe said he wanted the focus to be on "putting in place additional investment to address the challenges of providing better homes for people in Ireland."

"We'll be putting in place more resources for our health system to ensure that more people get the kind of service they deserve when they visit our hospitals, our primary care centres and our doctors."

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