Budget 2010

Introduction

The main Budget changes which may affect people living in Ireland are set out below.

This document sets out changes in the areas of social welfare, tax, health, transport, environment, housing, education, employment and other areas.

Some of the changes announced in the Budget come into effect immediately. Others take effect from the beginning of January 2010. Many others have to be finalised before coming into effect. Some elements of these measures may change when the Finance Bill is published – this is expected in early February 2010.

For a full list of the Budget changes, please read the Department of Finance’s Summary of Budget Measures.

Social Welfare

General changes to personal payments

The following payments will be reduced by €8.30 per week (from January 2010):

  • Jobseeker’s Benefit
  • Jobseeker’s Allowance
  • Supplementary Welfare Allowance
  • One-Parent Family Payment
  • Prisoner’s Wife’s Allowance
  • Pre-Retirement Allowance
  • Farm Assist
  • Health and Safety Benefit
  • Widow’s and Widower’s (Contributory) Pension (under 66)
  • Widow’s and Widower’s (Non-Contributory) Pension
  • Deserted Wife’s Allowance
  • Deserted Wife’s Benefit (under 66)

Guardian’s Payment (Contributory) and Guardian’s Payment (Non-Contributory) will be reduced by €7.50 per week (January 2010).

These reductions apply to the full-rate payment. There are proportional reductions for people getting reduced payments (January 2010).

Qualified adult

The qualified adult rate for the following payments will be reduced by €5.50 per week (from January 2010):

  • Jobseeker’s Benefit
  • Jobseeker’s Allowance
  • Supplementary Welfare Allowance
  • Pre-Retirement Allowance
  • Farm Assist
  • Health and Safety Benefit
  • Illness Benefit
  • Disability Allowance
  • Blind Pension
  • Injury Benefit

This reduction applies to the full-rate payment. There are proportional reductions for people getting graduated payments.

Qualified child

The qualified child rate for all social welfare payments will be increased by €3.80 per week (from January 2010).

Older people

There will be no change to the maximum rate of the following pensions (from January 2010):

  • State Pension (Contributory)
  • State Pension (Transition)
  • State Pension (Non-Contributory)
  • Invalidity Pension (for people who are 65)
  • Widow’s/Widower’s (Contributory) Pension (over 66)
  • Death Benefit Pension (over 66)
  • Deserted Wife’s Benefit (over 66)
  • Carer's Allowance (over 66)

There will be no change to the Increase for a Qualified Adult for these payments.

People with disabilities

The following disability payments will be reduced by €8.30 per week (from January 2010):

  • Illness Benefit
  • Disability Allowance
  • Blind Pension
  • Injury Benefit
  • Invalidity Pension (for people under 65)

Disablement Pension under the Occupational Injuries Scheme will be reduced by €8.40 per week (January 2010).

This reduction applies to the full-rate payment. There are proportional reductions for people getting graduated payments (January 2010).

There will be no change in the monthly rate of Domiciliary Care Allowance.

Carers

Carer’s Allowance will be reduced by €8.50 for claimants under 66 years of age. Half-rate Carer's Allowance will be reduced by €4.25 for claimants under 66 years of age. (January 2010).

This reduction applies to the full-rate payment. There are proportional reductions for people getting graduated payments.

There will be no reduction in Carer’s Allowance for people aged 66 and over.

Carer’s Benefit and Constant Attendance Allowance will be reduced by €8.20 per week (January 2010).

There is no change to the Respite Care Grant or the Domiciliary Care Allowance.

Families and children

From January 2010, Child Benefit will be reduced by €16 per month (approx €3.69 per week).

Increase for a Qualified Child will rise to €29.80 (€3.80 increase) per week (January 2010).

All Family Income Supplement (FIS) weekly income thresholds will increase by €6 per week per child (January 2010).

Maternity and Adoptive Benefit

There will be a reduction of €4.50 in the minimum rate and €10 in the maximum rate of Maternity and Adoptive Benefit (January 2010).

Jobseeker’s Allowance

The rates below relate to claimants who have no assessable means.

Jobseekers aged 25 years and over from January 2010
New and existing claimants Personal Rate Increase for Qualified Adult
Maximum rate €196 €130.10
Reduced rate where job offers or activation measures have been refused €150 €130.10

Further details of this measure will be published in the Social Welfare Bill 2010.

The full rate of Jobseeker’s Allowance will be paid to qualified claimants aged under 25 where they either have dependent children or are participating in an approved education or training course.

Jobseekers aged under 25 years from January 2010
Age Personal rate Increase for Qualified Adult Applies to
18 - 19 (no change) €100 €100 New and existing claimants
20 - 21 €100 €100 New claimants
22 - 24 €150 €130.10 New claimants

Supplementary Welfare Allowance

The rates below relate to claimants who have no assessable means.

Claimants aged 25 years and over from January 2010
New and existing claimants Personal Rate Increase for Qualified Adult
Maximum rate €196 €130.10
Reduced rate where job offers or activation measures have been refused €150 €130.10

Further details of this measure will be published in the Social Welfare Bill 2010.

The full rate of Supplementary Welfare Allowance will be paid to qualified claimants aged under 25 where they either have dependent children or are participating in an approved education or training course.

Claimants aged under 25 years from January 2010
Age Personal rate Increase for Qualified Adult Applies to
18 - 19 (no change) €100 €100 New and existing claimants
20 - 21 €100 €100 New claimants
22 - 24 €150 €130.10 New claimants

PRSI Contributions

From 2011 a new Universal Social Contribution will replace employee PRSI, the health levy and the income levy. It will be paid by everyone at a low rate on a wide base as a collective contribution to public services. (Note, 8 December 2010: a Universal Social Charge will be introduced from 1 January 2011 which replaces the income levy and the health levy only.)

Treatment Benefit

The Treatment Benefit Scheme will be restricted to the medical and surgical appliances scheme, free dental examinations and free eyesight examinations.

Rent Supplement and Mortgage Interest Supplement

Rent Supplement: there is no change to the minimum rent contribution. However, there will be a review of maximum rent levels in 2010.

A review of the operation of the Mortgage Interest Supplement Scheme will be completed early in 2010.

Social Insurance Payments
Present € New €
State Pension (Contributory)
under age 80 230.30 230.30
aged 80 and over 240.30 240.30
State Pension (Transition)
age 65 230.30 230.30
Widow's/Widower's (Contributory) Pension/Deserted Wife's Benefit
under age 66 209.80 201.50
aged 66 and under age 80 230.30 230.30
aged 80 and over 240.30 240.30
Invalidity Pension
under age 65 209.80 201.50
aged 65 230.30 230.30
Carer's Benefit/Constant Attendance Allowance 221.20 213.00
Disablement Pension 235.40 227.00
Jobseeker's/Illness/Health & Safety/Injury Benefit 204.30 196.00
Maternity/Adoptive Benefit – Minimum rate 230.30 225.80
Guardian’s Payment (Contributory) 176.50 169.00

Social Assistance Payments
Present € New €
State Pension (Non-Contributory)
aged 66 and under age 80 219.00 219.00
aged 80 and over 229.00 229.00
Carer's Allowance
under age 66 220.50 212.00
aged 66 and over 239.00 239.00
Blind Pension 204.30 196.00
Widow's/Widowers's (Non-Contributory) Pension/ Deserted Wife's/ Prisoner Wife's Allowance 204.30 196.00
One-Parent Family Payment 204.30 196.00
Pre-Retirement/Disability Allowance 204.30 196.00
Supplementary Welfare Allowance 204.30 196.00
Jobseeker's Allowance (25 years and over) 204.30 196.00
Farm Assist 204.30 196.00
Guardian’s Payment (Non-Contributory) 176.50 169.00

Increase for Qualified Adult: Social Insurance Payments
Present € New €
State Pension (Contributory)/(Transition)
under age 66 153.50 153.50
aged 66 and over 206.30 206.30
Invalidity Pension
under age 66 149.70 143.80
aged 66 and over 206.30 206.30
Jobseeker's/Illness/Health & Safety/Injury Benefit 135.60 130.10

Increase for Qualified Adult: Social Assistance Payments
Present € New €
State Pension (Non-Contributory) 144.70 144.70
Blind Pension 135.60 130.10
Pre-Retirement/Disability Allowance 135.60 130.10
Supplementary Welfare Allowance 135.60 130.10
Jobseeker's Allowance 135.60 130.10
Farm Assist 135.60 130.10

Child Benefit (monthly)
Number of children Present € New €
1 child 166 150
2 children 332 300
3 children 535 487
4 children 738 674
5 children 941 861
6 children 1,144 1,048
7 children 1,347 1,235
8 chidlren 1,550 1,422

Family Income Supplement (weekly income limit)
Number of children Present € New €
1 child 500 506
2 children 590 602
3 children 685 703
4 children 800 824
5 children 920 950
6 children 1,030 1,066
7 children 1,160 1,202
8 children 1,250 1,298

Income and other taxes

Income Tax

Restriction of reliefs

The restriction of income tax relief for high income earners* is being amended for 2010 and subsequent tax years to achieve an effective rate of income tax of 30% for people who were subject to the full restriction. PRSI and relevant levies will also apply. The entry level threshold for the restriction will now occur at adjusted income levels of €125,000 (was €250,000) and the full restriction will apply at €400,000 (was €500,000).

*This restriction of relief measure was introduced in Budget 2006, and came into operation from 1 January 2007. It limits the use of tax breaks by those with high incomes. It is based on restricting the amount of specified reliefs which a person can use to reduce their tax bill in any one year.

New Irish domicile levy

All Irish nationals and Irish-domiciled people with a worldwide income of over €1 million and Irish-located capital of over €5 million will pay a new Irish domicile levy of €200,000. This levy applies regardless of where the person is tax resident. No date has been set for the introduction of these measures yet.

Other Income Tax

Mortgage Interest Relief

Qualifying loans taken out before 1 July 2011 will continue to get relief for 7 years. Transitional measures will be provided for qualifying loans taken out between 1 July 2011 and end 2013.

People whose entitlement to relief is due to expire in 2010 or after, continue to qualify for relief at the applicable rate up until the end of 2017.

Mortgage Interest Relief will be abolished entirely by the end of 2017.

Corporation tax

The existing scheme providing a three-year exemption from tax on the income and gains of new start-up companies will be extended to include companies who commence trading in 2010.

Relief from income levy for certain farm expenditure

Relief from the income levy will be allowed for certain expenditure incurred by farmers to comply with the requirements of the EU Nitrates Directive 91/676/EEC.

Announcement on reform of income tax system in 2011

The Minister for Finance announced that a new system of two charges on income would be introduced in 2011.

A new Universal Social Contribution will replace employee PRSI, the health levy and the income levy. It will be paid by everyone at a low rate on a wide base as a collective contribution to public services.

Income tax will apply on a progressive basis to those with higher incomes.

Proposed property tax and water charges

The Minister for Finance indicated that work will begin on registration of ownership and valuation of land in preparation for a site valuation tax. A system of water metering for homes will also be introduced. Water charges will be based on consumption above a free allocation. Further details will be announced by the Minister for the Environment, Heritage and Local Government.

Excise Duties

Decrease in excise on alcohol

Excise duty is reduced on beer and cider by 12 cent (VAT inclusive) per pint, on spirits by 14 cent (VAT inclusive) per half glass, and on wine by 60 cent (VAT inclusive) per 75cl bottle (from midnight, 9 December 2009).

Vehicle Registration Tax (VRT)

The following package of measures will be introduced in January 2010:

  • Car Scrappage Scheme
  • Extension of VRT exemption for Electric Vehicles
  • Extension of VRT relief scheme for plug-in hybrid electric vehicles

A Car Scrappage Scheme is being introduced with effect from 1 January 2010, to run until 31 December 2010. VRT relief of up to €1,500 will be provided where a car of 10 years or older is scrapped in accordance with certain criteria and a new car that falls within emissions bands A or B (i.e. with CO2 emissions of 140g/km or less) is purchased.

The existing VRT exemption for series production electric vehicles and the VRT relief of up to €2,500 for series production plug-in hybrid electric vehicles (both of which are due to expire on 31 December 2010) are being extended for 2 years until 31 December 2012.

New carbon tax

A carbon tax at a rate of €15 per tonne is being introduced on fossil fuels. The tax will apply to petrol and diesel with effect from midnight, 9 December 2009 and from 1 May 2010 to kerosene, marked gas oil (for agricultural use), Liquid Petroleum Gas (LPG), fuel oil and natural gas. The application of the tax to coal and commercial peat is subject to legislation. A vouched fuel allowance scheme will be introduced to offset the increases for low income families.

Value Added Tax (VAT)

Reduction in standard VAT rate

The standard rate of VAT will be reduced from 21.5 to 21 %with effect from 1 January 2010. This decrease will apply to all goods and services which are currently subject to VAT at 21.5%.

Health and tourism

Health

The estimate for 2010 includes:

  • An additional €97m for the Fair Deal scheme which, with the €55m provided in 2009, brings the total additional allocation for this scheme to €152m. This will allow for growth in the number of people qualifying for the scheme in line with demographic needs.
  • An additional €10m for more Home Care Packages, bringing the total provision for this scheme to €130m in 2010, again reflecting increased need.
  • An extra €230m for demand-led schemes, including additional numbers of medical cards, bringing the total allocation for these schemes to over €3bn in 2010.
  • An additional €20m to continue implementation of the National Cancer Control Programme, in accordance with clinical priorities. This includes improvements in lung, prostate, rectal and pancreatic cancer and radiotherapy treatment as well as initiation of a colorectal cancer screening programme. Further details about which will be made available in the coming days.
  • €70m to address various other demographic service needs, the details of which will be finalised as part of the 2010 Health Service Executive (HSE) Service Plan.
  • €17m to support suitable projects that demonstrate innovation in service delivery.

Hospital charges

There are to be no increases in the statutory charges for Accident & Emergency, day and in-patient services.

The charges for private beds in public hospitals are not being increased.

Drugs Payment Scheme

The monthly threshold is being increased from €100 to €120 per month.

Prescription charge for medical card and Long Term Illness Card holders

Medical card and Long Term Illness Card holders will pay a charge of 50 cent per prescription item, subject to a monthly ceiling of €10 per family.

(Expected implementation date 1 April 2010)

Dental treatment

Under the Dental Treatment Services Scheme (DTSS), adult medical card holders may obtain dental services from dentists in private practice under contract to the HSE. In 2010, expenditure will be reduced by €30m to the 2008 level of €63m.

Mental health and disability

Capital programme

Multi-annual funding for the mental health capital programme is to be provided from the sale of HSE assets. In 2010 the HSE will invest an initial sum of €43 million in the programme.

The mental health capital programme will provide a range of facilities across the entire spectrum of mental healthcare facilities including acute psychiatric units, child and adolescent units, day hospitals, community nursing units and high support hostels, and will provide the infrastructure necessary to enable its transformation into a patient-centred, flexible and community-based mental health service, where the need for hospital admission is reduced, whilst still providing in-patient care when appropriate.

Provision for continued funding of the programme will be made in the 2011 Estimates and subsequent years, in the light of the previous year’s programme of asset sales.

Innovation funding for disability and mental health

Funding of €3m is to be provided to the Person Centre, a non-profit organisation which has established a fund to support transition from institutional to person-centred models of care in disability and mental health services. The organisation is also funded by Atlantic Philanthropies.

Inspection of residential facilities for children with disabilities

Funding is being provided in 2010 to implement an independent registration and inspection system of residential services for children with disabilities. The registration and inspection system will be implemented by the Social Services Inspectorate in the Health Information and Quality Authority (HIQA) and will start by the end of 2010.

Detailed proposals will also be brought to Government early in 2010 for the protection of vulnerable adults with disabilities who are in residential services provided by, or on behalf of, the State.

Changes in maximum weekly rates of health allowances from January 2010

These have been reduced in line with social welfare rates.

2009 2010
Supplementary Allowance payable to Blind Persons
in receipt of a Blind Pension:

Blind Pensioner
Blind Married Couple


63.60
127.20


61.00
122.00
Infectious Diseases Maintenance Allowance
Personal Rate
Person with qualified adult
Personal Rate with qualified adult and qualified child

204.30
339.90
365.90

196.00
326.10
355.90

Tourism

The overall tourism budget will be increased in 2010 to enable a marketing drive with the objective of increasing tourism numbers and revenue by 3%. Investment in visitor attractions will be increased threefold to €22m.

A credit review system will examine the credit policies and practices of the banks for all Small and Medium Enterprise (SME) sectors. It will pay particular attention to sectors such as tourism where particular stresses have been reported.

Iarnród Éireann will be participating in a new scheme, to be developed by Fáilte Ireland, aimed at senior citizens visiting Ireland from abroad. This group will be offered vouchers for greatly discounted rail travel throughout Ireland.

Funding will be provided for a project at the Kennedy Homestead in Dunganstown, County Wexford from which Senator Ted Kennedy’s forefathers emigrated in the early nineteenth century.

Environment, Housing, Consumer Affairs

Environment

Carbon tax

A carbon tax at a rate of €15 per tonne of carbon is being introduced on fossil fuels. The tax will apply to petrol and auto-diesel with effect from midnight, 9 December 2009; and from 1 May 2010 to kerosene, marked gas oil, Liquid Petroleum Gas (LPG), fuel oil and natural gas.

The application of the tax to coal and commercial peat is subject to a Commencement Order. Exemption from the tax will apply only to participants in the EU Emissions Trading Scheme (ETS) in respect of fuels so covered.

Car scrappage scheme

A car scrappage scheme is being introduced with effect from 1 January 2010, to run until 31 December 2010. VRT relief of up to €1,500 will be provided where a car of 10 years or older is scrapped in accordance with certain criteria and a new car of emissions bands A or B (CO2 emissions of 140g/km or less) is purchased.

Extension of VRT exemption for electric vehicles

The existing VRT exemption for series production electric vehicles and the VRT relief of up to €2,500 for series production plug-in hybrid electric vehicles, which is due to expire on 31 December 2010, is being extended for 2 years until 31 December 2012. Support will also be provided to offset the initial battery costs for such cars.

Energy efficiency measures

Allocation of about €130m for energy efficiency measures will include a new multi-annual National Retrofit Programme in 2010.

€50m of the carbon tax yield will be used to fund measures such as help for households at risk of fuel poverty to make their homes warmer.

The local authorities will receive additional funding to retrofit the social housing stock.

Extension of the existing capital allowances scheme for energy-efficient equipment purchased by companies from seven categories of eligible equipment to ten.

Relief from income levy for certain farm expenditure

Relief from the income levy will be allowed in respect of certain expenditure incurred by farmers to comply with the requirements of the EU Nitrates Directive. This measure will cost approximately €6m over a three-year period and will cost €1.8m in 2010.

Flood relief

In excess of €70 million will be provided over the remainder of 2009 and into 2010 to help those affected by recent flooding and to fund work to minimise the risks of future incidents. The review of investment priorities which will shortly be published will also provide for continued substantial investment in flood relief.

Housing

Mortgage Interest Relief

Qualifying loans taken out before 1 July 2011 will continue to get relief for 7 years. Transitional measures will be provided for qualifying loans taken out between 1 July 2011 and end 2013.

People whose entitlement to relief is due to expire in 2010 or after, continue to qualify for relief at the applicable rate up until the end of 2017.

Mortgage Interest Relief will be abolished entirely by the end of 2017.

Mortgage arrears

The Financial Regulator has been asked to examine the extension of the six-month moratorium on legal proceedings, which is already in the Regulator’s Code of Conduct on Mortgage Arrears, to 12 months for all lenders.

Mortgage Interest Supplement

A review of the operation of the Mortgage Interest Supplement Scheme will be completed early in 2010.

Rent Supplement

The minimum contribution has not been changed. Rent limits will be reviewed to reflect reductions in private rent levels (during 2010).

Investment in housing

The spending allocation of the Department of Environment, Heritage and Local Government for housing will be reduced. The social housing investment programme will change its focus from acquisition and construction of housing towards cheaper methods, such as leasing.

Energy efficiency and warmer homes

There will be a new multi-annual National Retrofit Programme. It is expected that this scheme may create up to 5,000 jobs in 2010. The local authorities will get extra funding to retrofit the social housing stock. It is intended that over one million homes will have been retrofitted by 2025.

€50m of the yield from the new carbon tax will be used to fund measures such as helping to make homes warmer for households at risk of fuel poverty.

A vouched fuel allowance scheme will be developed. This will aim to offset the increased costs generated by the proposed carbon tax for low-income families who are dependent on certain fuels to heat their homes.

Property taxation

Work will shortly begin on the registration of ownership and the valuation of land, in preparation for the introduction of a site valuation tax.

Water metering

Preparations are under way to introduce a system of water metering for homes. When water charges are introduced, they will be based on consumption above a free allocation.

Consumer Affairs

Reduction in standard VAT rate

The standard rate of VAT will be reduced from 21.5% to 21% with effect from 1 January 2010. This decrease will apply to all goods and services which are currently subject to VAT at 21.5%.

Decrease in excise on alcohol

Excise duty is being reduced on beer and cider by 12 cent (VAT inclusive) per pint, on spirits by 14 cent (VAT inclusive) per half glass, and on wine by 60 cent (VAT inclusive) per 75cl bottle. These reductions will take effect from midnight on 9 December 2009.

Motoring

A car scrappage scheme is being introduced with effect from 1 January 2010, to run until 31 December 2010. VRT relief of up to €1,500 will be provided where a car of 10 years or older is scrapped in accordance with certain criteria and a new car of emissions bands A or B (CO2 emissions of 140g/km or less) is purchased.

The car being scrapped:

  • Must have been registered in the State in the name of the purchaser of the new car for at least 18 months previous to the date of scrappage
  • Must be 10 years old or more from the date of first registration
  • Must be scrapped after 9 December 2009
  • Must be scrapped within 60 days of the date of the new car being registered, or have been scrapped within the previous 60 days of the date of the new car being registered, provided the date of scrappage is after 9 December 2009
  • Must have a valid NCT certificate of roadworthiness, or one that has expired no more than 90 days prior to issue of the Certificate of Destruction; or documentation to indicate that it has been presented for and failed an NCT roadworthiness test in the previous 6 months
  • Must have been insured for use on the road for at least 12 months in the 18 months prior to the issue of the Certificate of Destruction

Being ‘scrapped’ means that the old car has been taken to an official End of Life Vehicles (ELV) authorised treatment facility and a Certificate of Destruction is issued by the facility in respect of the car.

Further detailed information on the operation of the scheme will be posted on the Revenue website in the coming days.

The existing VRT exemption for series production electric vehicles and the VRT relief for series production plug-in hybrid electric vehicles of up to €2,500, which is due to expire on 31 December 2010, is being extended for two years until 31 December 2012. There will be a grant for half the cost of the batteries for the first 6,000 electric cars on Irish roads.

A carbon tax at a rate of €15 per tonne is being introduced on fossil fuels. The tax will apply to petrol and auto-diesel with effect from midnight, 9 December 2009.

Home heating

The carbon tax will apply from 1 May 2010 to kerosene, marked gas oil, Liquid Petroleum Gas (LPG), fuel oil and natural gas.

The application of the tax to coal and commercial peat will be subject to a Commencement Order. A vouched fuel allowance scheme will be developed to offset the increases for low-income families dependant on such fuels.

Electricity is not subject to the carbon tax.

Education and employment, other areas

Education

Student grants and scholarships

From January 2010 the rates of student grants and scholarships will be reduced by 5%. It will apply to all existing and new grant-holders.

From 2010 people in receipt of the Back to Education Allowance and the VTOS allowances for those pursuing a Post-Leaving Certificate course will not be eligible for student support grants but they will not have to pay the student service charge or college fees. This will apply to all new grant-holders in 2010 onwards.

Support under the Millennium Partnership Fund is being withdrawn saving €2m.

Adult and further education

The number of places provided in Senior Traveller Training Centres (STTCs) will be reduced from 984 places to 684 places. This is in line with the Traveller Education Strategy. Travellers can continue to access the full range of adult and further education programmes across the country.

Allowances to participants in VTOS, Youthreach and STTCs will be reduced in line with the appropriate social welfare rates or FÁS trainee allowances.

Capital

€579m will be allocated to continue the significant investment being made in the school building programme, which includes €72m from the capital carry-over.

€141m is being provided for infrastructural investment in higher education of which €46m will be provided for investment under the Strategy for Science, Technology and Innovation.

€50m is being allocated to support the integration of information and communications technology in teaching and learning in schools. That includes €7m from the capital carry-over.

Higher education

The provision in 2010 for universities and institutes of technology will be €1,266m - a 4% reduction on the 2009 provision.

The funding available in 2010 for projects under the Strategic Innovation Fund will be €18m - a reduction of €8m on 2009.

Additional expenditure measures

The following measures are being provided for the implementation of commitments under the Renewed Programme for Government.

  • €12m will be allocated to provide 500 extra teachers over the next three years. This allocation will allow for the employment of an extra 200 teachers starting in early 2010 and a further 150 teachers starting in September 2010.
  • €14m will be allocated to provide extra teachers from September 2010 for the 2010/11 school year to meet demographic pressures and to ensure no further increase in the pupil-teacher ratio. This allocation will fund 600 posts in primary schools and 330 posts in post-primary schools.
  • €19m will be provided to maintain school capitation grants at current levels and to take account of increased pupil numbers. This allocation will also enable extra funding to be allocated to schools for school books and to support curricular activities.
  • The allocation for the Vocational Training Opportunities Scheme (VTOS) will be increased by €7.5m to meet additional expenditure on allowances due to the change in profile of applicants for the scheme.
  • An extra allocation of €3m will be provided for the promotion of Gaeilge in schools as part of the new 20-year Strategy for the Irish Language.
  • The provision for the National Educational Psychological Service (NEPS) will be increased to provide for the rise in psychologists by 28 to 210. This will allow NEPS psychologists to provide direct service to every first and second level school and an enhancement of service to special schools and units.

Teachers

The provision for teacher in-service education support will be €29.79m compared with a 2009 estimate of €40m. Restructuring of existing services will continue in 2010. Services will be focused on priority areas including special educational needs, child protection guidelines training, implementation of new procedures for underperforming teachers, and Project Maths.

The allocation for pre-service teacher education is being reduced by €3m and will be achieved by reducing the number of post-graduate conversion places.

The supply teacher scheme at primary level will cease from the start of the 2010/11 school year. Normal substitution arrangements which apply to primary schools generally to cover teacher absences will be used to cover substitution in those schools that participated in the scheme.

From the start of the 2010/11 school year, the maximum number of uncertified sick leave days allowed in the school year for teachers in primary, secondary and community and comprehensive schools will be reduced to 7 days. This is the same number of days available for teachers in vocational schools and community colleges.

School transport

The provision for school transport will be €188m compared with a 2009 estimated out-turn of €178m. While efficiencies made during 2009 will continue to yield savings in 2010, an increase of €10m will be provided which includes provision for new services as necessary.

Reduction in allocations

The following organisations will have their allocations reduced:

  • National Council for Curriculum and Assessment reduced by €0.93m
  • National Council for Special Education reduced by €2.3m
  • Higher Education Authority reduced by €0.562m
  • Dublin Dental Hospital reduced by €0.410m
  • Dublin Institute for Advanced Studies reduced by €0.546m
  • Royal Irish Academy of Music reduced by €0.303m
  • National Qualifications Framework (NQAI, FETAC, HETAC) current allocation reduced by €2.1m

Funding will be reduced by €1.2m in 2010 for projects in Local Drugs Task Force areas in Dublin city and county. Funding provided by the Department of Education and Science for these projects will be phased out in 2011.

Employment

Allocation of resources

Nearly €136m in funding will provide an additional 26,000 individuals with training places and supports as follows:

  • €56m is being made available to FÁS for short-term courses of 10/20 weeks.
  • €20m will go to an Activation Fund which will involve an open call for innovative proposals that have the capacity to provide work, education and training targeted at the construction and low-skilled sectors.
  • €14m is being made available, in addition to €26m from the EU, for supports to redundant workers in eligible companies under the European Globalisation Adjustment Fund.
  • €9.5m is being made available as support measures for the food industry.
  • Supports to employers through the Stabilisation Fund and the Temporary Employment Subsidy Scheme will cost €165m in 2010.
  • In order to advance the Smart Economy there will be a single stream of funding to make Government investment in science and technology more efficient.

Employers and self-employed

  • €36m will be allocated to an Employers Job Incentive Scheme giving PRSI exemption to encourage employers to take on employees. This will bring the total places available for the unemployed to over 180,000.
  • The existing scheme providing a three-year exemption from tax on the income and gains of new start-up companies will be extended to include companies who commence trading in 2010.
  • A credit review system will examine the credit policies and practices of the banks for all SME sectors. It will pay particular attention to sectors such as tourism where particular stresses have been reported.
  • Under the Employer Jobs (PRSI) Incentive Scheme, where an employer creates a new job and takes on a person who has been unemployed for 6 months or more, the employer will be fully exempted from the liability to pay PRSI for the first year of that employment. This will give employers an 8%-10% saving on employment costs for each new job created. Full details will be announced early in 2010.

Allowances

The FÁS Training Allowance to new entrants who are not entitled to Jobseeker’s Benefit/Allowance will be discontinued.

There will also be reductions in Community Employment and Job Initiative allowances.

Other reductions will be made to:

  • Funding for FÁS and Skillnets for training those in employment
  • The grant for Community Employment (CE) training and materials overhead
  • Part-time third-level places for FÁS
  • Current non-pay funding for agencies and offices under the aegis of the Department of Enterprise, Trade and Employment and Science and Technology programmes

Other areas

Public Service

Salaries

Public service salaries will be reduced as follows:

Salaries less than €125,00 per year

  • 5% on the first €30,000 of salary
  • 7.5% on the next €40,000 of salary
  • 10% on the next €55,000 of salary

This produces overall reductions in salaries ranging from 5% to just under 8% for salaries up to €125,000.

Salaries more than €125,00 per year

  • 8% on salaries of up to €165,000
  • 12% on salaries up to €200,000
  • 15% on salaries of €200,000 or more.

These reductions are in line with the recommendations of a recent report of the Review Body on Higher Remuneration.

The salaries of Ministers and Secretaries General of Government departments will be reduced by 15%. The Taoiseach’s salary will be reduced by 20%.

There will be further reductions in fees paid by State bodies for professional services. There will also be savings from general reductions in grants and grants-in-aid paid by departments.

Pensions

A new single scheme will be introduced for all new entrants to the public service from 2010 onwards. Main provisions include:

  • Raising of the minimum public service pension age from 65 to 66 years initially, and then to be linked with the State Pension age
  • Maximum retirement age of 70 years
  • Pensions to be based on “career average” earnings rather than final salary

Legislation will be introduced early in 2010 to give effect to these measures.

The Government will consider using the Consumer Price Index (CPI) as the basis for post-retirement increases for both existing and future pensioners.

For existing public servants retiring after 2010, the Minister may bring forward further proposals as part of the legislation introducing the single new scheme.

In developing the new scheme the Government will be considering:

  • Employee pension contribution - the rate of employee pension contribution remains at 6.5% but may apply to all pensionable pay
  • Pension accrual rate applying to pensionable pay taking account of entitlement to a State Pension
  • Some groups, such as Gardaí, Defence Forces, prison officers and firefighters will retain early retirement ages but other special terms, such as added years, will be generally discontinued

These terms to apply to the President, Oireachtas members, the judiciary and the Attorney General.

Any retirements in 2010 will be on existing pay terms before the reductions announced in this Budget.

National Solidarity Bond

A new National Solidarity Bond is proposed to help the financing of the capital investment programme underlying the 2010 Budget (that is, the bond will not be used to fund additional spending).

The bond will be in addition to the current range of “State Savings” products (savings bonds, savings certificates, prize bonds, national instalment savings and the Post Office deposit account).

The main features of the new bond will be:

  • Investors can choose to invest for a five-, seven- or ten-year period
  • Interest will be paid annually
  • Investors will be entitled to a final redemption bonus on maturity as an incentive to leave their funds invested; the bonus will be different for each investment period
  • Full details of the tax treatment of the bond will be provided in the Finance Bill 2010
  • It will be possible to invest in the bond by lump sum or by occasional payments

The bond will be available through the following channels:

  • Internet
  • Telephone
  • Direct debit
  • At your local Post Office

The bond will be sold by An Post on behalf of the National Treasury Management Agency (NTMA). Further details will be announced by the NTMA early in 2010.

Voluntary and community sector

  • Continued support for communities through local and community development programmes, supports for volunteering, for locally-based community and voluntary groups and the Community Services Programme.
  • A revised Scheme of Community Support for Older People will be introduced early in 2010, which will provide security equipment for upwards of 9,000 older people. Sixty four organisations will continue to receive funding under the Scheme to Support National Organisations in the Community and Voluntary Sector, as will the 21 volunteer centres and other volunteering initiatives.
  • Employment levels will be maintained at existing levels in 450 community projects under the Community Services Programme (CSP) by requiring projects to generate additional resources from their operations.
  • Increased funding for the EU co-funded Rural Development Programme for Ireland 2007-2013 (LEADER).
  • Capital funding of €33m (including Údarás na Gaeltachta) is being provided for the Gaeltacht and Islands in 2010. This allocation includes investment in marine works, road improvements, access to the islands and water schemes.
  • Continued support for language development programmes under Ciste na Gaeilge and the Advanced Irish Language Skills Initiative for third-level institutions. Capital funding of €0.6m will facilitate the expansion of Irish language social and cultural centres in the main urban areas.

Page edited: 28 January 2010