Minimum wage up alongside increase in cost of fuel and cigarettes

Billions of euros for social housing, a new Defence Forces uniform, and a Christmas bonus social welfare payment are among the measures in Budget 2026.

The total size of the new Budget measures falls at 9.4 billion euros, broken into additional expenditure of 8.1 billion euros and a 1.3 billion euro envelope for tax measures.

Some of the key expenditure measures include 2.9 billion euros to deliver thousands of new build social homes and second-hand acquisitions, more than half a billion euros in carbon tax revenue for residential and community energy upgrade schemes, and a 10 euro increase in weekly social protection payments.

Meanwhile, there is an increase in the Carer’s Allowance income disregard of 375 euros for a single person and 750 euros for a couple, and 35,000 additional children are set to benefit from the National Childcare Scheme.

Almost a billion euros has been allocated for public transport services to support the public transport network, and there will be an increase in acute hospital capacity of at least 220 beds.

There will also be 1,717 additional special needs assistants.

There will be a 500 euro permanent reduction to the student contribution fees – although this will be a year-on-year increase as it replaces a temporary 1,000 euro cut that had been in place.

The Government has allocated 11.5 million euros for Domestic and Gender Based Violence initiatives next year.

It will also fund 400 new Defence Force members and recruit up to 1,000 gardai.

The renters’ tax credit, which had been due to expire this year, will be extended for a further three years to the end of 2028.

On the tax side, the 9% VAT on gas and electricity has been extended to 31 December 2030.

There will be a 9% VAT on food, catering and hairdressing services from 1 July 2026 but hospitality accommodation has been excluded.

The Government has also put a 9% VAT rate for sale of apartments to drive delivery.

A carbon tax increase will be applied to auto fuels from Wednesday and all other fuels on May 1 next year.

There has been an increase in the USC Middle threshold by 1,318 euros to ensure the lowest-paid workers do not fall into higher bands, after the minimum wage was raised by 65 cents.

Finance Minister Paschal Donohoe announced a new Derelict Property Tax, to replace the Derelict Sites Levy, stating that dereliction is “a blight on our towns and cities”.

And, as an old reliable, there has been an increase in the excise duty and VAT on a pack of cigarettes by 50 cents.