Helping you get through tough times

The budget explained

pink piggy bankWith all of the media coverage and austerity talk it’s not surprising the word “budget” strikes terror into the hearts of many. While it’s tempting to run and hide under a table, it’s important to know how the budget will affect you so you can plan for next year. How do all of these complex taxes and charges relate to you? We have done some of the work for you…

Third level student

You may have heard the student contribution increased by €250. This means that next year it will cost €2,250 for registration fees. There will be a 3% reduction in the rate of student maintenance grant from 2012 for existing grant holders. The colleges themselves will also have a 2% cut in core funding. If you are receiving back to education allowance your annual book grant will be reduced from €500 to €300 in 2012.

Thinking of doing a post grad?

If you are currently receiving a maintenance grant for post graduate study you will continue to receive your payment but the 3% reduction will apply.

The real change is for new applicants in 2012. New postgraduate students will get a fee grant only and no maintenance grant. Fees will only be paid for those in the lowest income bracket (to be defined). It is expected that 2,000 people will qualify for this support.
A further 4,000 students could receive a €2,000 contribution towards their fees which would be means tested. But overall post grads are becoming more difficult to do without hefty financial resources.

Work part-time

Job seekers allowance for people who work-part time will be reduced. It will now be based on working a five day week instead of a six. This means, if you worked three days and got job seekers allowance for three days, you will now only get the payment for two days.

The good news is that there has been a change to the USC threshold. This means if you earn €10,036 or less a year, you will not have to pay the USC.

Unemployed

There has been no change to payments for unemployed people. However, you may find that other things may affect you like the 2% VAT increase on luxury items.

Secondary school student

There will be bigger classes for fee paying schools so fees may go up. School running costs are to be cut by 2%. The back to school clothing and footwear scheme will be reduced by €55 for 11- 22- year- olds.

Youth reach

Payments for 16-17 year olds will be reduced to €40. This means a €36.65 decrease for 16-year-olds and €55.75 less for 17-year-olds. The payment tor 18-years plus will remain unchanged.

Own a car?

Not awesome news if you drive a car. Petrol will go up 1.4 c and diesel will go up 1.6 c a litre straight away. Also motor tax will rise from 1 January.

Renting

Dan’t panic! The €100 household charge applies to the owner not the tenant, that means the landlord will have to pay this, not you. In January, the minimum contribution towards rent supplement as a single person will increase to €30 and will increase to €35 for couples.

Own a house ?

Good news if you were a first time buyer between 2004 and 2008. There is an increase in mortgage tax relief for you. The downside is you will have to pay a new household charge of €100 a year, unless you live in a ghost estate!

Health

The drug payment scheme threshold will be put up by €12  making it €132. Also the price of private beds in public hospitals will be going up. If you have private health insurance, there is likely to be a knock on effect so expect it to be more expensive next year.

The old reliables

VAT will go up by 2% to 23% as of 1 January. This will affect a lot of stuff you buy.
Smokes have gone up 25c a pack as of midnight.
There has been no increase in the price of alcohol but the 2% hike in VAT will apply.

If you are finding all of this budget stuff a bit overwhelming you may want to check out these articles on tips for managing money and stress.

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