herald

Saturday 25 October 2014

Bruising budget hits workers, commuters, jobless, the old and the poor

NOBODY was spared the wrath of the country's sixth austerity budget with extra taxes on everything from cars to cigarettes, houses and savings.

At the same time, Public Expenditure Minister Brendan Howlin announced cuts to child benefit, funding for schools, medical cards and OAPs phone allowances.

The dreaded property tax was set at 0.18pc for ordinary homes while the controversial €200 second home charge is to remain in place for 2013.

Pensioners are to have their telephone allowance cut from €310 per year to €155 and student registration fees have been hiked by €250 to €2,500.

A last minute change by Finance Minister Michael Noonan will see cigarettes rise by 10c and the price of a pint rise by 5-10c from midnight.

Wine will be hit hardest in an effort to tackle below cost selling at supermarkets.



Petrol

There will be no increase in excise duty on petrol as the Cabinet is "concerned about the renewed possibility of cross-border trading".

TDs are to have expenses cut by around 15pc, while the Herald understands that from January 1 Deposit Interest Retention Tax (DIRT) will jump 3pc to 33pc.

The Herald can confirm mkajor changes in these areas:

COMMUTERS: A rise of 7-8pc in motor tax for most cars will equate to €38 higher charge for commuters with a 1.6 litre engine. Co2 efficient cars are to be hit with a 20pc hike.

HOMEOWNERS: A homeowner with a property worth €200,000 will pay €360 in tax a year. The second home charge of €200 will remain next year before being abolished in 2014. This means that people with two houses will pay the property tax on both and then the additional charge. A mansion tax of 0.25pc on houses worth €1m and over is introduced.

OAPS: Pensioners' free travel has been saved but they face a range of curtailments on their allowances. In particular Minister Noonan targeted the Telephone Allowance.

CHILDREN: Child benefit is being sliced by €10. The school clothing allowance is being reduced from €150 to €100 and pupil-teacher ratios are to be increased once again from 21-1 to a possible 23-1.

HEALTH: Medical card holders will now pay a €1 prescription charge. The threshold for availing of medical cards is being reduced for single pensioners from €36,000 to €30,000. Meanwhile, married OAPs will see the threshold go from €72,000 to €60,000.

WORKERS: The €127 PRSI exemption for the majority of employees is being scrapped. The move, which will affect anyone earning over €352 per week, will yield over €300m each year.

The decision is set to cost each employee €261 per year.

Speaking ahead of Mr Noonan's budget speech, sources told the Herald that there were a series of last minute changes due to yesterday's disappointing exchequer figures.

Because of the threshold changes, thousands of pensioners lose their entitlement to medical cards. They will instead be handed 'GP' cards which provide less medical benefits.

The €100 charge for attending A&E is also on the way up.

Government sources have described changes to the PRSI system as one of the "most important" measures.

DIRT, Capital Gains and Capital Acquisition taxes are all being bumped up by 3pc.

Changes in PRSI will also see the tax extended to income that was previously exempt, such as rental income.

Last minute measures aimed at pensioners with high incomes were agreed by ministers this morning. Over-70s with incomes of more than €60,000 will be hit with a three point hike in the Universal Social Charge (USC).

Teachers are also going to feel the brunt, with maternity leave cut to 26 weeks from 32.

And tourism will be given a budget of at least €5m -- a similar amount to last year because of The Gathering. Mr Noonan was due to offer assurances of funding for major projects including the new Luas service linking the red and green lines.

hnews@herald.ie

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