Date Posted: 13.10.2015

Families appear to be among the winners from measures contained within Budget 2016 with free GP care is extended to under 12s, additional free pre-school childcare and a €5 increase in child benefit.

The Government has also increased the entry point at which workers must pay the universal social charge (USC), and reductions have been announced for some USC rates.

The entry threshold to the unpopular tax levy has been raised to €13,000 from the previous level of €12,012, and those eligible for the lowest rate of USC will now pay a 1 per cent levy rather than the previous 1.5 per cent.

The 3.5 per cent rate of USC has been reduced to 3 per cent, and those earning between €18,668 and €70,000 per annum will now pay 5.5 per cent USC, rather than the previous 7 per cent.

This will relieve the tax burden for around one million middle-income earners, according to the Minister.

Furthermore, USC is to be “progressively” abolished over the coming years, however, a defined timeline was not mentioned, he said.

This is being done to entice more inward investment in Ireland and to entice emigrants home, according to Mr Noonan.

As anticipated, the National Asset Management Agency will provide an additional 20,000 housing units over the next five years, equivalent to 80 new units each week.

The vast majority of these will be in the Dublin region, and three-quarters of them will be “starter houses”, Mr Noonan said.

In line with predictions from earlier on Tuesday, the free GP scheme will now be extended to include under 12s.

Other measures likely to be welcomed by families are an increased allocation to the Department of Children and Youth Affairs, the early childhood care and education scheme has been extended, meaning children between the ages of three and five and a half years are now eligible for free pre-schooling.

In addition, two-weeks’ paternity leave for workers will become a statutory requirement as of September 2016.

Child benefit will increase by €5 per month to €140, and there will be a €3 increase in the old age pension along with an increase of €2.50 in the fuel allowance, bringing the payment up to €22.50 per week.

Extra funding for the Department of Education will create 2,260 new teaching posts in the next year, which includes 600 additional resource teaching positions.

This will bring the pupil-teacher ratio in schools down from the current level of 28:1 to 27:1.

Some 600 additional posts will be created within An Garda Síochána as part of a €2.2 billion allocation to the Department of Justice.

As expected, the Christmas bonus will be reinstated to 75 per cent of the pre-abolition rate for all social welfare recipients.

The respite care grant of €1,700 has been reintroduced, and the minimum wage will increase by 50 cent, from €8.65 per hour to €9.15, according to Minister for Public Expenditure Brendan Howlin.

The question of funding for housing had proven a divisive issue within the cabinet, according to reports, and neither Mr Noonan nor Mr Howlin made any mention of rent control measures or certain building incentives championed by Minister for the Environment Alan Kelly.

However, there will be an extra €17 million diverted towards providing emergency accommodation, bringing the total sum to €70 million, and a total of €500 million will be made available over the next year to build and acquire new homes.

The Capital Acquisitions Tax threshold has also been increased to €280,000 from the previous level of €225,000.

The Capital Gains Tax is to drop from 33 per cent to 20 per cent, while an earned income tax credit of €550 will apply for those who are self-employed including entrepreneurs and farmers.

The pension fund levy of 0.15 per cent is to end this year.

The motor tax system has been overhauled, and from now on five bands will apply compared to the previous regime of 20 different rates. These five bands will vary from €92 at the lowest level to an upper limit of €900, representing savings of over €4,000 for some hauliers who were paying in excess of €5,000.

Ireland will introduce the first OECD-compliant Knowledge Development Box in the upcoming Finance Bill, which will mean a reduced corporation tax rate of 6.25 per cent for eligible technology and software firms.

The measures are part of the first expansionary Government budget since the Fine Gael-Labour coalition came to power in 2011.

Outlining his view of the Coalition’s achievements while in office Mr Noonan said this Government had made significant progress in reducing both the size and cost of servicing the national debt.

He said in addition to bringing the public finances under control, specific initiatives such as the Promissory Note transaction, the extension of maturities on the State’s EU loans and the early repayment of the IMF loans has resulted in real and substantial savings to the Irish taxpayer.

Speaking on Tuesday morning, Mr Noonan said €750 million will be dedicated to reducing taxes, and a similar amount will be used for increased expenditure across health, education and justice.

Mr Noonan also confirmed excise duties on a packet of 20 cigarettes will rise by 50 cent from midnight and said this will afford the exchequer an additional €61 million in a full year. A pro-rata price increase will apply to other tobacco products.

The Minister said this would be the only tax-raising measure in the budget.