Supplementary Budget 2009

03/04/2009

The main changes as a result of the Supplementary Budget are as follows. The changes take effect from 1 May 2009 unless otherwise stated:

Income Levy

The income levy rates have doubled as follows, the thresholds have also been reduced:

o €0 – €75,036 (2%)
0 €75,037 – €174,979 (4%)
0 €174,980 + (6%)

Income of less than €15,028 will be exempt from the levy – reduced from €18,304. This has the effect of bringing minimum wage workers within the tax net.

Amendment has been made to the public section pension levy to account for the increase in the income levy. The new thresholds are as follows:

0 < €15,000 exempt
0 €15,000 – €19,999 – 5%
0 €20,000 – €60,000 – 10%
0 €60,000 + – 10.5%

Health Levies

Health levy rates have doubled as follows:

0 Below Threshold (was €100,100, now €75,036): rates increased from 2% to 4%.
0 Above Threshold (>€75,036): rate increased from 2.5% to 5%.

PRSI Ceiling

PRSI ceiling has increased from €52,000 to €75,036.

Mortgage Interest Relief

No change for first time buyers with mortgages drawn within the last seven years. Relief has been abolished for all other mortgages, and first time buyer mortgages when end of year seven has been reached.

Deposit Interest Retention Tax

DIRT Tax has been increased from 23% to 25%. This is consistent with the increase in the income tax levy, as deposit interest is specifically exempt from the income levy.

Capital Gains Tax/Capital Acquisitions Tax

The rates for both CGT and CAT have been increased from 22% to 25% from midnight on 7 April 2009. Reduction in CAT group thresholds also applies from this date.

Excise Duties

0 The mineral oil tax on diesel will be increased by 5c (including VAT) from midnight of 7 April 2009
0 Excise duty on pack of 20 cigarettes will be increased by 25c (including VAT) from midnight on 7 April 2009

VAT Margin Scheme

A VAT magin scheme is being introduced for dealers in the motor trade. Precise details will be included in the Finance Bill.

Summary of Main Expenditure Measures

0 Removal of social welfare Christmas bonus
0 Education – reduction in funding to 3rd level institutions
0 Agriculture – reduction in the rate of payment for the REPs scheme

Miscellaneous Provisions

0 Early retirement scheme for the Public Service
0 Civil service career break/shorter working year
0 Re-skilling & Training Scheme