Budget 2025: What next year’s Budget really means for you

Breaking down the government's budget announcement.

The Budget total for 2025 is €8.3 billion, made up of €1.4 billion in tax cuts and €6.9 billion in new spending.

There is a lot to get through, as there is with every year's budget, but the key standouts this year were social welfare going up, new cost-of-living payments being announced and the increases in cigarette and vape prices.

Here's how Budget 2025 really means for you in the coming year.

Budget 2025: What next year's budget really means for you

Minimum wage
As per the Budget announcement, the National Minimum Wage will increase by 80c, bringing the hourly rate of €12.70 to €13.50 starting January 1, 2025.

A worker earning minimum wage in Ireland will now see a yearly increase of €1,424.

Housing and rent
Rental tax credit increased to €1,000, up from €750 in the previous Budget.

"Even better, you can backdate this for 2024, so if you’re a jointly-assessed couple, you could claim up to €2,000. That’s a big boost for your bank balance," says Nick Charalambous, Managing Director of Alpha Wealth.

"First-time buyers will be pleased to know that the Help-to-Buy scheme has been extended until 2029.

"This allows you to continue receiving up to €30,000 to help with buying your first home. For current homeowners, mortgage interest relief has been extended for another year, a lifeline for those feeling the pressure from rising interest rates."

Social welfare
As part of a €2 billion social protection package, weekly Social Protection payments will increase by €12.

It was also announced that there will be a double payment made in both October and December.

New parents can obtain a 'baby boost’ payment of €420, as well as picking up two double child benefit payments, in November and December at €280 per child.

There will be a €400 lump sum payment for Working Family Payment recipients

Maternity, paternity, adoptive and parents’ payments will all increase by €15.

Minister Donohoe said that there will be two double payments of Child Benefit in November and December. There will also be a double payment of the Foster Care Allowance | | Follow live: https://t.co/uArrWWUYrA pic.twitter.com/cPi0Ve3oW7

— RTÉ News (@rtenews) October 1, 2024

Student fees
Third level students will benefit from the Budget as college fees are being reduced by €1,000, bringing the annual cost down to €2,000.

"This will provide much-needed financial relief for those navigating the costs of higher education," Mr Charalambous explains.

"Postgraduate students will also benefit, with the fee contribution grant increasing from €4,000 to €5,000. This change is a positive step toward making education more accessible and affordable."

Cigarettes and vapes
Always a big point of interest every year, and this year is no different, with the news being that a packet of 20 cigarette will increase by €1 from midnight on October 2, bringing the price of cigarettes to €18.05.

In terms of vapes, a planned domestic tax will apply to all e-liquids at a rate of 50c per ml, meaning a typical disposable vape will cost about €9.23 including VAT.

Unlike cigarettes, this new tax will be less immediate and will take effect in the middle of next year.

Tax
The standard rate income tax cut off point has increased from €44,000 to €42,000.

"Taxpayers will feel some relief with the changes introduced in Budget 2025. The entry point for the higher 40% tax rate is moving up to €44,000, so more of your income will be taxed at the lower 20% rate," says Mr Charalambous.

"This will leave middle-income earners with an extra €100 per month.

"Combined with a 1% cut in the USC, these changes are designed to ease financial pressures and boost your take-home pay."

Tax credit changes aimed at carers have also been announced, and they include; a €150 home carer tax credit, €150 single person child carer tax credit, €300 incapacitated child tax credit, €300 blind person's tax credit, and a €60 Dependent Relative Tax Credit.