Measures on childcare, energy costs expected in Budget

The Budget will be unveiled at 1pm, with the Government pledging a personal tax package, childcare initiatives and actions to alleviate energy costs. Simon Harris, Tánaiste and Minister for Finance, alongside Jack Chambers, Minister for Public Expenditure, will unveil €8.65 billion in supplementary Budget spending, comprised of €7 billion in new measures and €1.65 billion in tax adjustments.

Cabinet members will finalize the Budget this morning before Harris and Chambers, in that order, present their 90-minute Budget speeches in the Dáil chamber. Income-tax proposals will be of particular interest after last year's budget with minimal personal tax changes, which displeased opposition parties and certain government backbenchers.

Although inflation is nearing 4%, the Government anticipates citizens will still feel the effects of the tax changes in their pockets. This will be the second Budget since the Fianna Fáil-Fine Gael-Independent coalition assumed office in 2025, with fuel prices, living expenses, and the risk of additional protests influencing the coalition's political strategy.

Opposition parties are expected to reiterate their requests for energy credits, with Sinn Féin advocating for universal credits of €400 and the Labour Party and Social Democrats proposing targeted credits of €400 for middle-income earners. Taoiseach Micheál Martin has promised to halt carbon tax increases for home heating oil and gas throughout the Government's tenure.

Excise duty reductions on petrol and diesel will be extended into the spring, along with a substantial €650 million capital allocation for SEAI home energy upgrades, encompassing more solar PV, new battery grants, and a boiler scrappage scheme. An extension of the fuel support scheme for farmers, hauliers, and transport operators will also be announced.

Measures to reduce childcare expenses are expected to receive significant attention in the Budget speeches. Harris recently authorized an increase in the tax-free earnings for individuals caring for children in their home from €15,000 to €20,000. Children's Minister Norma Foley secured approval to raise the income threshold to allow more families to benefit from free childcare.

The government leaders have also agreed to cap childcare costs at €550 per month. A €15 million scheme to assist rural pubs was a recent addition, with a tax rebate scheme for draught beer kegs to be revealed following Minister for Enterprise Peter Burke's advocacy. The coalition leaders have also agreed to introduce a €500 disability cost payment, payable as a lump sum in January 2027, with future adjustments being determined.

State pension rates will rise by €10 weekly, as will other core social welfare rates. The amount available for first-time buyers under the Help-to-Buy Scheme will increase by €5,000, reaching €35,000. Currently, the scheme offers first-time buyers a tax refund of up to 10% of the purchase price of a new or self-built home, capped at €30,000.

The rent tax credit will rise by €150 for single individuals and €300 for couples, from €1,000 and €2,000 respectively. A notable announcement regarding sports funding is anticipated. Additionally, there will be a slight increase in the weekly income disregard for carer's allowance, currently set at €1,000 for single individuals and €2,000 for couples.

Funds will also be designated for enhanced capitation for schools, extra teachers, special needs assistants, and therapists. The coalition aims to highlight record investment in special education. The buildup to this year's Budget has been characterized by tense exchanges between government ministers as Jack Chambers' department attempted to impose spending restrictions on other departments.

The repercussions of these curbs will be evident when individual departments present their proposals for 2027 after the speeches in the Dáil.