Budget 2026: Urgent Updates Reveal Tax Cuts, Welfare Changes

UPDATE: In just under a month, the Irish government will unveil its highly anticipated **Budget 2026**. With significant changes on the horizon, the budget is set to introduce a **€9.4 billion** package, including **€1.5 billion** in tax cuts and a **€7.9 billion** spending plan, marking a **7.3%** increase over last year. As **October 2023** approaches, officials are emphasizing a cautious approach amid economic uncertainties, particularly with **US tariffs** climbing to **15%**.

Urgent Impact: This budget carries immediate relevance for families and workers across Ireland. The government has indicated that **once-off measures**, such as energy credits and double child benefit payments, will not be included this year. Instead, officials are focusing on establishing more sustainable financial structures.

Key Measures:
– **Child Benefit Reform:** Taoiseach **Micheál Martin** confirmed that a new **second-tier child benefit** will be introduced, although details remain unclear as complexities are still being addressed.
– **Income Tax Adjustments:** While last year promised a **€1,000** tax cut for average workers, this year’s expectations are tempered. Finance Minister **Paschal Donohoe** has focused on job creation and infrastructure over substantial tax reductions.
– **VAT Rate Changes:** The government will reduce the **VAT rate for the hospitality sector** from **13.5%** back to **9%**, aimed primarily at restaurants and cafes. This measure is expected to significantly impact the budget’s tax package.

Slight Welfare Increases: Government sources suggest a modest **€10** increase in weekly social welfare payments, a decrease from last year’s **€12** hike. This adjustment indicates a trend towards tighter budgetary constraints.

Rent Tax Credit Increase: The **Rent Tax Credit** is likely to see an increase, with proposals suggesting it could rise to **€2,000** per person, reflecting ongoing changes in rent regulations. The government is committed to helping tenants manage rising expenses.

Future-Proofing Childcare Costs: Ahead of the budget, **Minister Simon Harris** is expected to outline a plan that includes a **€200 cap** on childcare costs, responding directly to family pressures.

Inheritance Tax Discussions: Backbenchers are pushing for adjustments to the **inheritance tax system**, with potential changes to thresholds for estates without children. Incremental changes could be on the horizon, although no immediate revisions have been confirmed.

Third-Level Fees and Vaping Tax: Controversy surrounds third-level fees, set to revert to **€3,000**, despite government pledges to reduce costs. Additionally, a **€5 duty** on e-cigarette refill cartridges is set to double, reflecting a growing focus on public health.

What to Watch For: As **Budget Day** approaches, all eyes are on the government’s final proposals and adjustments. With a clear focus on sustainable measures, the upcoming budget is pivotal in shaping Ireland’s economic landscape.

Readers are encouraged to follow these developments closely as they unfold, sharing insights and updates on social media. The implications of these changes will resonate across households, making this budget one of the most significant in recent years.