Tuesday 6 December 2016

Children, elderly and families the big winners as Government eyes re-election with Budget bonanza

FINANCE

Children, elderly and families big winners with Budget 2016
Children, elderly and families big winners with Budget 2016

THE Government has made its re-election pitch with a giveaway Budget that targets the young, old and working families.

Finance Minister Michael Noonan today unveiled a package of measures that includes free GP care for all children under the age of 12, a cut to the Universal Social Charge that will put €20-a-week back in workers' pockets and a recruitment drive for teachers, gardai and nurses.

The only tax to be hiked in Budget 2016 is the excise duty on cigarettes, which will add an extra 50 cents to a pack of 20.

However, as Fine Gael and Labour doled out the goodies they were also locked in a divisive battle over what to do for hard-pressed renters.

As rents across the country, and particularly in Dublin, continue to spiral the Coalition has failed to reach any agreement on rent certainty.

Labour ministers told the Herald they were "very unhappy" with the stance taken by the Department of Finance who do not want to distort the market.

The Herald can reveal that the much-anticipated childcare package promises to save parents an average of €1,000-a-year.

Children's Minister James Reilly has finalised details of a second year of free pre-school care for every child aged between three and five.

It will begin from September of next year and result in the average child benefiting from 23 weeks of extra free pre-school care. There is also €73m to be invested in supports for children with disabilities and special needs. Mr Reilly also announced the introduction of 8,000 "low cost" childcare places.

As signalled in last year's Budget, the child benefit will rise by €5 to €140. Fathers will also be able to take paid paternity leave for the first time. From late next year they will be entitled to two weeks off following the birth of their child.

In their speeches, Mr Noonan and Public Expenditure Minister Brendan Howlin claimed that the economic recovery is now being spread across the country. They said that every household would benefit from today's measures which amount to €1.5bn, split evenly between tax cuts and spending.

Around €600m was used to cut the much-hated USC.

There will be a 1.5pc reduction in the 7pc rate to 5.5pc. The 3.5pc and 1.5pc rates will be reduced by 0.5pc each. The entry point at which workers start paying the USC will rise from €12,012 to €13,000.

Changes to the minimum wage combined with the USC cuts will mean people in that category are better off to the tune of €700.

In his speech, Mr Noonan also pointed to the "unfair treatment" that self-employed workers have suffered at the hands of the tax system over many years. He has announced a €550 tax credit for them to try redress some of the difference.

Additionally, the Government has set a target of bringing home 70,000 emigrants next year with a series of measures for entrepreneurs. Capital Gains Tax (CGT) for the self-employed and entrepreneurs will drop to 20pc from 33pc.

There will no increase to dole payments but the long-term unemployed will benefit from the Christmas bonus. A person receiving the standard unemployment benefit of €188-a-week will get a one-off payment of €141 in the first week of December.

Social Protection Minister Joan Burton has put together a package for the elderly that includes a €3 rise in the pension, the restoration of the Christmas bonus to €173 and a €2.50 hike in the fuel allowance. Altogether, a single pensioner will gain €330 on the back of the budget.

Transport Minister Paschal Donohue has secured in excess of €20m to help fund bus and rail services next year. He is also to cut the motor tax rate for hauliers.

In education, the Government said that it wants to hire 2,000 new teachers. When retirements and changing demographics are taken into account it will amount to an extra 300 teaching posts in the system.

This will see the average pupil-teacher ratio drop by one to 27:1.

Justice Minister Frances Fitzgerald, who is under major pressure to come up with an adequate plan to tackle rural crime, has got funding for up to 700 new gardai.

It is still unclear how many new nurses and doctors will be hired but sources said there will be a "significant increase" in health staff with a focus on speech and language therapy.

The inheritance tax threshold for children inheriting the family home will raise to €280,000. This will be the start of a process that will see it increase to €500,000 over a three to five-year period. The respite care grant for carers will be restored to its previous level of €1,700.

The threshold for family income supplement will be widened to allow more families avail of the weekly tax-free payment available to employees with children.

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