Tax cuts and social welfare increases were the two principal themes of the Budget, delivered in the Dáil by the Minister for Finance, Charlie McCreevy today. The Minister for Finance has described his Budget as the largest social welfare package in history. There have been big changes in the taxation system; tax bands are being significantly widened, which will mean far fewer people on the top rate. Acknowledging a huge budgetary surplus, Mr McCreevy announced measures which, he said would tackle the problem of social exclusion; pensioners, parents and the disabled are among those who will benefit. Among the main features of the Budget are:
Cuts in the top rate of tax from 46% to 44%, and cuts in the standard rate of 2% from 24% to 22%. These changes will benefit practically all 1.2 million taxpayers in the State. These tax reductions mean that single persons on PAYE on the average industrial wage will see their income tax cut next year by nearly £20 per week; and a married couple with both spouses on the average industrial wage will gain almost £40 per week.
The tax bands are being widened with an increase of £3,000 at the standard rate for single or widowed persons and £6,000 for married couples on two incomes. Basic personal allowances are being increased by £500 for the single person and £1000 for married couples. Special allowances are being doubled. There will also be a full move to a tax credits system by March 2001.
Maximum weekly personal rates for all old age and related pensions are to be increased by £7 per week from the first week of May 2000. Other rates are to be increased by £4 per week from the same starting point.
Child benefit is to be increased by £10 per month for each of the third and subsequent children. Family income supplement thresholds are to be increased by £13 per week, from early May 2,000. The back to school clothing and footwear allowance, payable in September, is being increased by £20.
Under a special insurance scheme, benefit will be paid to carers who are obliged to leave the workforce to provide fulltime care while protecting their employment rights for a period of up to one year.
Full-rate disability allowance is to be paid to those in residential settings currently receiving half-rate payments. Other measures include an additional death grant of £1,000 to be paid in bereavements while the centenarian's benefit is to be increased from £500 to £1,000.
Cigarettes go up by 50 pence per 20 packet from midnight. The increased revenue will go to health care. No additional revenue from alcohol or petrol were announced.
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