Louth TD says tax changes that came into effect this week will help mitigate cost of living

Income tax changes announced in Budget 2023 will take effect this week to help mitigate the cost of living crisis, Louth Fine Gael TD Fergus O'Dowd has said.

“In September, Ministers Donohoe and McGrath announced a personal income tax package worth more than €1.1 billion as part of Budget 2023,” The Deputy said.

“The aim of the package is to ensure people take home more of their hard-earned cash, that they pay the higher tax rate of tax at a later point and that those who are benefitting from the changes to the minimum wage are not negatively impacted by additional USC.

“The key features of the changes will see the main personal tax credits (Personal, Employee and Earned Income) increase by €75 from €1,700 to €1,775 and the standard rate cut-off point being increased by €3,200, going from €36,800 to €40,000 for single people and from €45,800 to €49,000 for married couples / civil partners with one earner.

“This means constituents will take home more of the money they earn and that more households will be protected from the rising cost of living and impact of inflation.

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“An increase in the Home Carer Tax Credit of €100 will also come into effect this week, bringing it from €1,600 to €1700. This offers a greater level of support to parents who are caring for a child or dependent person at home. An increase of €1,625 to the 2% USC rate band ceiling will also ensure that a full-time worker on the minimum wage, who benefits from the increase in the hourly rate from €10.50 to €11.30, will remain outside the highest rates of USC.

“These changes are being made at a time when people are trying desperately to manage tighter household budgets and reduce their outgoings in a bid to make ends meet as the war in Ukraine continues to impact the cost of goods and services at home.

“We must continue to make adjustments to income tax, where possible, to ensure work pays and that people are incentivised to take up a job, go for a promotion or return to the labour market. People will see a difference in their next pay packet on the back of the changes made.”