Everything we know so far about Budget 2025 social welfare, pension and taxes

Budget 2025 will be announced in less than three months and it is expected there will be social welfare increases and tax relief for workers

Cabinet signed off on the Summer Economic Statement yesterday, which confirmed that Ireland’s next Budget will be worth at least €8.3 billion. This is expected to see an estimated public spending bill of €6.9 billion along with a €1.4 billion tax package.

New Minister for Finance Jack Chambers has warned the Budget will not be a “giveaway” but has given some insight into what can be expected. Here’s everything we know so far:

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Cost of living measures

Finance Minster Jack Chambers said any additional cost of living supports “won’t be of scale” compared to previous years.

He said: “The flash inflation rate for June is 1.5% and that gives a different context to any further interventions or supports. If there are additional supports when it comes to cost of living, it won’t be of a scale near to what it was in previous years.”

It has been reported that Minister for Housing Darragh O’Brien is considering increasing the Rent Tax Credit that could see single renters pocket an extra €1,000.

Initially, the scheme allowed single renters to claim back €500 if they spent at least €2,500 on rent over a year, while couples assessed jointly could nab €1,000 if they spent €5,000. Last year saw an increase to €750 for solo tenants and €1,500 for couples.

Now, there’s talk of another bump up in Budget 2025, with whispers of €1,000 for individuals and €2,000 for couples.

Pensions

Earlier this year, former Minister for Finance Michael McGrath pledged that pensioners will see an increase of at least €12 per week in the upcoming budget. The State pension in Ireland for a person aged 66 or over is currently €277.30 per week.

Social welfare

In their pre-Budget submission, Social Justice Ireland have called for social welfare payments to increase by at least €25 a week. In their statement, they wrote: “Core social welfare rates should increase by a minimum of €25 per week in Budget 2025.

“This would see the basic social welfare rate rise to €257 in 2025. A €25 increase is required to benchmark core social welfare rates to 27.5 per cent of average earnings and to address the impact of continued inflation on low income households.”

Minister for Finance Jack Chambers confirmed that there would be hikes to social welfare payments, but the level of these increases will not be finalised until September during his talks with Minister for Social Protection Heather Humphreys.

Taxation

A tax package worth €1.4 billion is expected in Budget 2025. Minister Chambers said Government will have to decide where the additional money will go, but said that “workers are a priority”.

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