In January 2025, Ireland will implement significant social welfare changes as part of Budget 2025, aiming to alleviate the cost-of-living pressures for its citizens. These measures encompass increases in various payments and the introduction of new supports to enhance financial well-being.
Weekly Social Welfare Payment Increases
Most weekly social welfare payments will see a €12 increase, benefiting recipients across various schemes. Proportionate increases will also apply to qualified adults and individuals receiving reduced rates.
Enhancements to Family and Child Supports
- Maternity, Paternity, Adoptive, and Parent’s Benefits: Each of these benefits will rise by €15 per week, providing additional support to new and expectant parents.
- Child Support Payment: Weekly rates will increase by €8, reaching €62 for children aged 12 and over, and by €4, totaling €50 for children under 12.
- Newborn Baby Grant: A one-time grant of €280 will be available for children born on or after December 1, 2024, supplementing the first month’s Child Benefit of €140.
Working Family Payment Adjustments
Income thresholds for the Working Family Payment will rise by €60 per week across all family sizes, extending support to more low-income working families.
Support for Carers
- Carer’s Benefit: The scheme will now include self-employed individuals, broadening the eligibility criteria.
- Carer’s Allowance: This allowance will serve as a qualifying payment for the Fuel Allowance, subject to meeting all existing criteria, including the means test.
Domiciliary Care Allowance Increase
A monthly increase of €20 will be applied to the Domiciliary Care Allowance, offering greater assistance to those caring for children with severe disabilities.
Asset Disregard Adjustment for Care Transitions
For recipients of the State Pension (Non-contributory), Disability Allowance, or Blind Pension, the asset disregard amount when selling a home to move into care will increase to €337,500, effective January 2025.
Expanded Fuel Allowance Eligibility
The means test disregard for the Fuel Allowance will extend to individuals aged 66 and over, with thresholds set at €524 for single persons and €1,048 for couples, enabling more seniors to qualify for this support.
Energy Credit for Households
All households will receive a €125 energy credit starting January 1, 2025, aimed at reducing utility expenses during the winter months.
Tax-Free Benefit Voucher Increase
The maximum exemption for tax-free vouchers or non-cash benefits provided by employers will rise from €1,000 to €1,500 annually, with the permissible number of benefits increasing from two to five per year.
National Minimum Wage Hike
The national minimum wage will increase by 80 cents, setting the new rate at €13.50 per hour, effective January 1, 2025.
Universal Social Charge Reduction
The 4% rate of the Universal Social Charge (USC) will be reduced to 3%, decreasing the tax burden on low to middle-income earners.
VAT Reduction on Heat Pump Installations
The VAT rate for installing heat pumps will drop from 23% to 9%, encouraging the adoption of energy-efficient technologies.
| Measure | Details | Effective Date | Additional Notes |
|---|---|---|---|
| Social Welfare Payment Increase | €12 weekly increase for most payments | January 1, 2025 | Proportionate increases for qualified adults and reduced rates |
| Child Support Payment | Increase of €8 (age 12+) and €4 (under 12) per week | January 1, 2025 | |
| Newborn Baby Grant | One-time €280 payment | December 1, 2024 | In addition to first month’s Child Benefit of €140 |
| Working Family Payment Thresholds | Increase of €60 per week across all family sizes | January 1, 2025 |
These comprehensive measures reflect the government’s commitment to supporting citizens through enhanced social welfare provisions, tax reliefs, and incentives for energy efficiency, collectively aimed at improving the standard of living across Ireland.
FAQs
What is the Newborn Baby Grant, and who qualifies?
The Newborn Baby Grant is a one-time payment of €280 for children born on or after December 1, … . It supplements the first month’s Child Benefit of €140, providing a total of €420 to assist with initial child-rearing expenses.
How does the reduction in the Universal Social Charge affect taxpayers?
The reduction of the 4% USC rate to 3% lowers the tax burden on low to middle-income earners, resulting in increased take-home pay and improved disposable income for affected individuals.
Who is eligible for the increased Working Family Payment thresholds?
Families with income below the new thresholds, increased by €60 per week regardless of family size, may qualify for the Working Family Payment. This adjustment aims to support more low-income working families.
