“And from the ashes of the pandemic, together, we will build a stronger, more resilient Ireland.”
Minister Paschal Donohue, Budget 2021 Speech, 13th October 2020
The Budget 2021 was announced on Tuesday 13th October last. Minister Donohue, in reference to the COVID-19 Pandemic and its effects on the financial state of the country, stated that the total value of support measures to date, amounted to €24.5 billion. This is almost eight times last year’s Budget plan. Minister Donohue noted that “we have never experienced a challenge like this in modern times, but equally Ireland has never delivered such a strong response”
Income Tax, USC, & PRSI
There were no changes made to either of the income tax bands, they remain at 20% for the standard rate and 40% as the higher rate.
The Universal Social Charge 2% band ceiling will increase from €20,484 to €20,687. Medical card holders continue to pay a reduced rate of USC until the end of December 2021.
The weekly income threshold for the higher rate of employer’s PRSI increases from €394 to €398.
Remote Working Tax Credit
The following expenses will be covered as an allowable home expense for e-working, where an employer has not contributed financially towards the expense:
- cost of broadband
- Other vouched expenses, may be covered where they are “wholly, exclusively and necessarily” part of the employees work. In order to qualify as an e-worker, an employee must:
Further information on expenses covered will be available on the Revenue website.
Employment Wage Subsidy scheme
The scheme will continue until 31 March 2021, with similar schemes likely to continue from 1 April 2021, carrying through to the end of 2021, according to Minister Donohue.
Temporary Wage Subsidy Scheme
Any overpayments of the Temporary Wage Subsidy Scheme, received by an employer must be refunded to Revenue.
Parent’s Leave and Parent’s Benefit
From April 2021 Parent’s Leave will be extended by a further 3 weeks, bringing an employee’s entitlement to parent’s leave to a maximum of 5 weeks’ leave. This extension will apply to children born or adopted from November 2019, and can be taken up to each child’s second birthday or within 2 years of adoption. The leave is available to both parents.
State pension Age will revert to 66
Legislation will be introduced before the end of 2020, reversing the increase in pension age from 67 to 66, in social welfare legislation.