€25 Billion of spending has been unveiled by the Minister of Finance, Paschal Donohoe. He has pledged to build a “stronger Ireland” from the “ashes of the pandemic”. Almost half of this spend will go on Covid-19 supports, with the Department of Health, Housing and Social Protection all receiving budget increases this year.
What are the main features of the 2021 Budget?
A maximum grant of €5000 per week will be available under a new scheme for businesses which closed due to Covid. This payment is based on the business’s average weekly turnover in 2019. The scheme comes into effect immediately with the first payments due to be issued mid November and is available until March 31st, 2021. In order to qualify, businesses must demonstrate a drop in turnover of up to 80%.
The hospitality vat rate has been reduced from 13.5% to 9% and will be implemented from November 1st until December 31st, 2021.
Debt warehousing for small and medium sized businesses is to be extended for a year with no interest applied.
A new version of the Employment Wage Subsidy Scheme will be introduced after the current scheme ceases in March 31st, 2021.
The Pandemic Unemployment Payment has been extended. However, the highest rate of €350 will not be restored. Those who have been in receipt of the PUP for the past four months will receive a Christmas bonus
There is an increase in the Qualified Child Payment. This increase is €5 per week for children over 12 years and an increase of €2 per week for children under twelve years of age.
The 12.5% Corporation Tax Rate remains unchanged.
There are no major changes to Income Tax credits or bands, however more targeted small changes will be introduced such as a change in the ceiling of the second USC rate band which will increase from €20,484 to €20,687. This move ensures that a full-time worker on the minimum wage will remain outside the USC’s top rate of USC.
To ensure that a full-time worker on minimum wage will not have their hours reduced, the weekly threshold for the higher rate of employer PRSI will go from €394 to €398.
Earned Income Credit is now €1,650 up from €1,500 to bring it equal to the PAYE credit.
The pension age which had due to increase to 67 in January 2021 will now not go ahead.
