Budget 2009 Review - April '09
We are pleased to bring you a brief update on the 2009 Budget speech made by the Minister for Finance on 8th April 2009. The main provisions of the Budget have been well documented in the national media and on the following websites: www.irlgov.ie and www.welfare.ie. Below are a select number of points that may have some impact on HR Policies.
Main Changes
Income Levy
The Income Levy doubled to 2%, 4% and 6%, with all entry levels lowered to €15,028, €75,036 and €174,980 respectively.
Capital Gains Tax
The Capital Gains Tax rate has been increased from 22% to 25% with effect from midnight on 7th April 2009.
Benefit Entitlements
In this year's budget the following have decreased:
Social Welfare
- Jobseeekers allowance will be reduced for claimants under the age of 20 to €100 per week from 1st May 2009;
- The Christmas bonus payment for all social welfare payments has been cancelled.
Reform of Back to Work Allowance and Back to Education Allowance
The Back to Work Allowance will be closed to new applicants and will be replaced by two new Back to Work Enterprise Allowance Schemes (BTWEA). The allowance period for BTWEA will be reduced from four years to two years and the qualifying period will also be reduced from two years to 12 months. Immediate access to a shorter BTWEA for someone who qualifies for Jobseekers Benefit or who qualifies for statutory redundancy.
Diesel Charges
With effect from midnight on 7th April 2009, tax on diesel will be increased by 5c per litre. This increase will have an impact on those who drive regularly as part of their role, and those who commute by car to work. Employers may want to consider reviewing any mileage allowance provided in their Travel Expenses Policy for employees who drive as part of their job. Also, if an employer has a Flexible Working Policy in place, employers may contemplate whether allowing employees to work from home might be an option, to alleviate the expense of commuting.
Changes in the Public Sector
Early Retirement
A scheme was announced to allow civil or public servants aged 50 or over to retire from the public service with a reduction of pension entitlements. 10% of the relevant lump sum will be payable immediately with the balance paid later at the normal retirement age of 60/65.
Career Break Scheme
A scheme was announced whereby civil servants who take a career break for three years will be paid an incentive payment of 33% of gross pay to a maximum of €12,500 per year.