Budget 2023 Update

Yesterday the Minister for Finance and Minister for Public Expenditure and Reform announced details of Budget 2023 and what has been described as a ‘cost-of-living Budget’, responding to inflation in Ireland running at highs not seen in many decades. There were no real surprises announced that hadn’t already been published by the media, specifically around social welfare, the state pension and other income tax changes. 
 
The Impact on Private Pensions
There were no changes to the private pensions landscape as this area is likely to be addressed in the Finance Bill, due to be published on the 20th October.

There is a current lack of clarity as to the optimal pension structures for Company Directors to utilise for their retirement funding and we expect this issue to be clarified in the Finance Bill.

There will likely also be broader changes to the pension system, in line with the ongoing move towards pension reform and simplification.

The Finance Bill is due to be published on or around 20th October.

The main changes in the budget were as follows:  
•  An increase of €3,200 to €40,000 in the income tax standard rate band for all earners
•  An increase in the Personal, Employee & Earned Income Tax Credit from €1,700 to €1,775
•   Ceiling of the second USC rate band will be increased from €21,295 to €22,920
•   Continuation of reduced rate of USC of 2% for medical card holders and those earning less than €60,000
•   €12 increase per week in main welfare payments and State pension
•   One-off €500 payment to people on Disability Allowance, Invalidity Pension and Blind Pension
•   Normal Christmas Bonus to be paid in early December

We will of course be in contact when the Finance Bill is published in October to keep you informed as to the anticipated changes in pensions legislation.  In the interim, should you have any queries, your Client Advisor is always available to speak to you about your retirement planning objectives or contact us on 01 2375500 or email justask@harvestfinancial.ie.