Ireland Budget 2025 Comes With Social Welfare Cuts And Other Alterations

The Ireland budget 2025 with a total of €8.3 billion would put the country on the right track and on a “firm footing for the future”, the Minister of Finance said. 

Mr Chambers said that social welfare cuts and new policies that are strategised in a way that would positively reflect the country’s growth, would “ensure that everyone sees a promising and hopeful future in Ireland”. 

(Also read: What Ireland’s Budget 2025 Means for Your Wallet and Daily Expenses?)

Among the other alterations, the minister explained there was a €2,000 increase in the standard tax cut-off point levelled up to €44,000. It has a fair increase for married couples and civil partners. 

The universal social charge (USC) rate that was previously set at 4 per cent is now reduced to 3 per cent. It is counted as the second consecutive reduction for the same rate in Ireland Budget 2025.  

Alterations in minimum wage 

The national minimum wage would witness a huge boost, which was formerly set at €0.80 per hour, and now would be €13.50 per hour. 

For the convenience of the “valued” workers who might be new to the worker’s family in Ireland, they would experience an entity threshold to the new 3 per cent rate by €1,622 to €27, 382. It is right in line with the increased minimum wage in Ireland. 

The minister further added, “This means that full-time workers on the minimum wage will see an increase in their net take-home pay of approximately €1,4243 on an annual basis”. 

He stated an exemption for the single person earning €20,000 or less in the year 2025 to remain outside the income tax net. It would be the positive consequence of cumulative increases to the main tax credits.

Cost of living

The entire package to improve the cost of living for the Irish people is €2.2 billion.

A reduction in VAT on electricity and gas is allowed till April 30th, 2025.

An additional €250 worth of energy credit is included in the budget that would be split over two payments. One payment is allowed this year and the next payment is in the coming year.  

Childcare costs have a huge Reduction. A decrease of €1,100 under a 44 percent increase in the National childcare scheme is approved. 

Alteration in welfare policies 

For new parents, the ‘baby boost’ payment is targeted at €420.

Double child protection programs would be launched in November and December, which would be €280 per child.  

The lump sum payment for Working Family Payment receipts would be €400.

An increment in maternity, paternity, adoptive and parent’s payments would be observed by €15. 

Double payment for recipients of long-term social protection payments will be witnessed in October. 

The state pension and the weekly social protection payments would increase by €12. 

Alterations in tax

A confirmed wholesome tax package in Ireland Budget 2025 accounts for up to €1.6 billion. 

The capital acquisition tax for the inheritance threshold would increase from €335,000 to €400,000. 

Only 6 per cent stamp duty would be charged for properties worth more than €1.5 million. 

Alteration in the health sector budget

An increment of €2.7 billion is allocated for the health sector of Ireland only for the next two years. 

In hospitals and community services, an addition of 495 beds is expected. 

Great support for women’s health measures including IVF and Hormone Replacement therapy fees would be free of charge. 

An exemption is allowed from income, capital gains and capital acquisitions on taxes regarding the payments to women affected by Cervical Check screening failures. 

Alterations in  alcohol, cigarettes and vaping

Although the largest budget is allocated for health infrastructure in Ireland, to prevent people from smoking, an additional excise duty on a packet of 20 would now be €1. It would bring the costs to €18.05 from midnight after a Dáil vote on excise duty. 

A greater tax for e-liquid that is used in e-cigarettes and vapes would be observed from mid-2025 with an increment of 50 cents per ml of the liquid. The disposable device would see an increase, bringing the price to €9.23 including VAT. 

No additional excise duty on alcohol, said the minister. 

Alterations in housing infrastructure spending 

Also, housing concerns have been the highlight of Ireland’s economic needs recently. The minister said that a new €3 billion investment for infrastructure would be added to Ireland Budget 2025. 

The spending would prove to be fuel for the ongoing as well as the incoming housing projects so that further improvements in housing and living standards could be addressed. The acceleration of the supply of new homes is the dire need of time now, he expressed.  

To facilitate this policy, the Land Development Agency would be given an allocation of a further €1.25 billion. This would make the total investment to the Agency to €6.25 billion for the quick delivery of thousands of additional affordable homes in the next year. 

Alterations in housing, renters, mortgages and landlords sector

An allocation of €7.8 billion would be granted to the Department of Housing to meet the housing needs in Ireland, as mentioned earlier.

This would allow the construction of 10,000 social homes. 

The rent tax credit would see for a joint family from €1,000 to €2,000.

An extension in mortgage relief is renewed with the ‘Help to Buy’ scheme till 2029 with an interest relief scheme in 2025.  

An extension in the landlord letting scheme is now granted. 

The tax rate on vacant homes would rise by five to seven times based on the property’s existing base Local Property tax rate in Ireland Budget 2025. 

Alterations in climate expenditure budget

Ireland takes its climate seriously. A €3 billion package is set aside for climate protection and transition from the year 2026 to 2030. 

The heat pump installation tax rate would be reduced to 9 per cent. 

From October 9, the carbon tax rate would go up €7.50. 

Education

The Leaving Cert level would see a free school books facility. 

The exam fee for junior and Leaving Certs would be waived. 

For primary schools, hot meal programs will be expanded in 2025. 

Special education schools and teachers would observe more special needs assistants. 786 teachers and 1600 assistants are planned. 

Alterations in public transport infrastructure 

An entire package of €3.9 billion for public transport and infrastructure only. 

A surprise free public transport for children under 9 years is granted. 

A new ‘Universal Companion Pass’ measure is given to people over 70 years of age who can bring along another person on public transport. 

Ongoing investment is fixed aside for cycling and walking infrastructure in the country of almost €1 million per day in the package. 

Water and energy are also a part of the transport infrastructure with a budget of €3 billion. 

Alterations in justice and fence structural budgets 

An increment of New Defence Forces personnel of 400 staff is planned for the year 2025.

A total of €3.9 billion budget is allocated for the justice system of Ireland with the recruitment of more Gardai officers and 350 prison officers. 

An expansion in the International protection processing system is planned with the recruitment of a surplus of 400 people.

Alterations for the business sector boost 

Ireland relies heavily on the business sector, especially tourism and hospitality. Thus, the Energy Subsidy Scheme for retail and hospitality sectors would be a whopping €170 million. 

Bonus for employees of these actors is granted with an increment of €1,500.

An extension in the Benefit-in-Kind (BIK) regime is given till the next year as a temporary universal relief.  

Taoiseach’s Views on Ireland Budget 2025

Taoiseach Simon Harris said that the budget has been designed with a “sensible approach” which would be suitable for people and would have the power to make a difference in everyone’s life.