CONTENTS

PART I

TAXATION AND PRSI MEASURES

Personal Tax Package 

The Income Tax and PRSI Package

Short Tax 'Year' 2001

Income Tax

Corporation Tax 

Capital Allowances 

Capital Acquisitions Tax (CAT)

Abolition of Probate Tax

Stamp Duty and Capital Gains Tax (CGT)

Proposed Tax Treatment of Credit Unions

Farmer Taxation

Taxation of Life Assurance Investment

Value Added Tax

Indirect Taxes

PRSI and Levies

   

PART II

SOCIAL INCLUSION MEASURES

Social Welfare 

Education and Science 

Housing 

Disabled 

Health and Children

Enterprise, Trade and Employment 

Tourism, Sport and Recreation 

Justice, Equality and Law Reform 

   

PART III           

OTHER CURRENT EXPENDITURE MEASURES           

Health and Children 

Enterprise, Trade and Employment 

Tourism, Sport and Recreation 

Education and Science 

Arts, Heritage, Gaeltacht and the Islands

Marine and Natural Resources 

Foreign Affairs 

Agriculture, Food & Rural Development

Justice, Equality and Law Reform 

Public Enterprise

   

PART IV           

CAPITAL EXPENDITURE MEASURES                    

Health and Children

Education and Science

Environment & Local Government

Arts, Heritage, Gaeltacht & the Islands

Office of Public Works

Finance

Enterprise Trade & Employment

Marine & Natural Resources

Tourism, Sport & Recreation

Justice, Equality & Law Reform

   

ANNEX A           

Details of Tax Changes in Budget 2001 and their effects on different categories of Taxpayers           

   

ANNEX B

Ireland and UK comparison of average Tax Rates         

   

ANNEX C  

Examination of Budget 2001 – Income Tax Measures using the National Anti Poverty Strategy Guidelines            

   

ANNEX D

Social Welfare and Health Rate Increases       

        

PART I

TAXATION AND PRSI MEASURES

   

Personal Tax Package

The Income Tax and PRSI Package

The main elements, including associated costs, of the personal tax package, which take effect from 6 April 2001, are as follows:

Changes to Income Tax and PRSI

Full Year Cost

£m

Personal Allowances increased by £800 single/£1,600 married and PAYE allowance increased by £1,000 at the standard rate

540

Standard Rate Bands:

£20,000 Single

£29,000 Married One Income

£40,000 Married Two Incomes 1

278

Reduction in Standard Rate of tax by 2% from 22% to 20%2

208

Reduction in Top Rate of tax by 2% from 44% to 42%

163

Reduction in Class A PRSI Employee Rate by 0.5%

63

Changes to Self-Employed PRSI Regime

-21

Total

1,231

Further details of the income tax elements of the package are set out in Annex A

1.  With a maximum transferability of £29,000 between spouses.

2.  The cost of reducing the Standard Rate of DIRT/PSWHT/Dividend Withholding tax and tax on Life Assurance policy holders funds by 2% from 22% to 20% (£45.2 million), is included in the total cost.

 

SHORT TAX 'YEAR' 2001

The alignment of the income tax year with the calendar year will involve having a short income tax 'year' from 6 April 2001 to 31 December 2001. 

While the amounts in this part are shown in 12 month terms, in general, all allowances, credits, bands, exemption limits and other annual amounts in the tax code will be adjusted, where relevant, from their full year value to take account of the short tax 'year' in 2001 i.e. from 6 April 2001 to 31 December 2001.  The adjustment factor is 0.74.

Arising from the short 'year', there will be once off cashflow costs to the Exchequer.

The cashflow losses in respect of tax receipts will be £119 million in 2001 and £109 million in 2002.

 

INCOME TAX

Age Exemption Limits

The limits under which all income is exempt from tax for those aged 65 and over are being increased by £1,000 single/£2,000 married to £8,500 and £17,000.

The cost of this measure is £0.7 million in 2001 and £1.7 million in a full year.

Widowed/Lone Parent's Allowance

The additional allowances for widowed and lone parents are being increased from £4,700 to £5,500.  In tax credit terms this is an increase to £1,100.  The standard rate band which applies to lone/widowed parents will be increased from £20,150 to £23,150 per annum.

The cost is included in the cost of increasing the personal allowance shown in the table above.

Professional Services Withholding Tax

The rate of withholding tax on professional services is being reduced from 22% to 20% with effect from 6 April 2001, in line with the reduction in the standard rate of income tax.

The cost is included in the cost of reducing the standard rate of income tax shown in the table above.

DIRT, Dividend Withholding Tax

The standard rate of DIRT and the Dividend Withholding Tax rate are being reduced from 22% to 20% with effect from 6 April 2001, in line with the reduction in the standard rate of income tax.

The cost of this measure is included in the table above.

Taxation Rate to apply to Life Assurance Investment/ Collective Funds

The reduction in the standard rate of income tax will carry over to the taxation of life assurance products and collective funds.  Investments in existing life assurance products and collective funds which continue to be taxed annually at the level of the life assurance company or fund will be taxed at 20% from 6 April 2001.  In the case of the new exit tax regime for both life assurance products and collective funds, which will apply generally for investments made from 1 January 2001, the exit tax rate will, from 6 April 2001, be 23%.

This cost of this measure is included in the table above.

 

Rent Relief

For under 55s, the ceiling on the amount of rent for which tax relief can be claimed will be increased by one-third to £1,000 single and £2,000 married. The rent relief that can be claimed by widowed persons, irrespective of age, is being equalised with the amount that can be claimed by married couples.

The cost of this measure is £5 million in 2001 and £7 million in a full year.

 

Rent a Room Scheme

A new 'Rent a Room' scheme is being introduced to encourage home owners to provide additional residential accommodation.

Where a room (or rooms) in a person's principal private residence is let as residential accommodation, and the gross annual rental income is less than £6,000, the rental income will be exempt from tax.

Room rentals coming within the scope of this scheme will not trigger a stamp duty clawback; neither will they affect full entitlement to CGT principal private residence relief (in the event of a subsequent disposal of the property) or full entitlement to mortgage interest relief.

The cost of this measure is £1 million in 2001 and £2 million in a full year.

 

Business Expansion Scheme and Seed Capital Scheme

The Business Expansion Scheme and Seed Capital Scheme are being renewed from 6 April 2001 to 31 December 2001.  In addition, from 6 April 2001, the County Enterprise Boards will be able to certify certain activities such as manufacturing, internationally traded services and commercial research and development for the purposes of the scheme.

This measure has no additional cost.

 

Seafarers Allowance

For the purpose of claiming the Seafarers Allowance, the number of days a seafarer is required to be on voyages to or from a foreign port in an EU flagged ship is being reduced from 169 days to 161 days.

The cost of this measure is £0.8 million in 2001 and £1 million in a full year.

 

Trade Unions

A new tax relief for the members' subscriptions to trade unions is to be introduced.  The relief recognises the role of trade unions in the development of Irish society.  It will be in the form of a standard rated allowance of £100 per annum.  This will give a tax credit of £20 p.a.

The cost of this measure is £6.3 million in 2001 and £9.5 million in a full year.

 

Tax Relief for Third Level Fees

The four existing tax reliefs for third level education fees will be merged and the conditions standardised.  Restrictions currently applying to tax relief for repeat years, more than one course, to individuals already holding a third level qualification and the exclusion of medicine, dentistry, veterinary medicine and teacher training will be removed.  Relief will be extended for college fees paid in the US and certain other countries not covered by the existing schemes.

The cost of this measure is £0.3 million in 2001 and £0.5 million a full year.

 

Medical Expenses Relief

The medical expenses relief will be widened.  The definition of 'relative' will now include persons currently covered in the Dependent Relatives Allowance (and there will be no income limit).  This will simplify the current procedure by allowing a taxpayer to claim the medical expenses relief directly in respect of designated relatives instead of first having to claim Dependent Relatives Allowance, for which there is an income limit of £5,564, or having to engage in the covenant procedure.

The existing restriction on relief for routine maternity care will also be removed.

The cost of this change is £1 million in 2001 and £1.5 million in a full year.

 

Tax Relief for Medical Insurance

From 6 April 2001 tax relief for medical insurance contributions will be granted at source.  Accordingly, persons renewing their cover from that date onwards will be invoiced net of tax relief. This development will also mean that a subscriber will get the full value of the tax credit regardless of whether his/her level of income would be sufficient to absorb the tax relief.  Relief for premiums invoiced in the year to 5 April 2001 will be given, through the tax system, in the short tax 'year' April 2001 to December 2001.

This will cost £4.0 million in 2001 and £6.7 million in a full year.  In addition there will be an estimated once-off cash flow cost to the Exchequer of £46 million in 2001.

 

Employment of a Carer Allowance

An employment of a carer allowance can be claimed at the marginal rate of tax where a person is employed to care for a family member who is incapacitated.  The amount that can be claimed under this relief is being increased from £8,500 to £10,000 p.a.

The cost of this measure will be £0.08 million in 2001 and £0.1 million in a full year.

 

Tax Relief for Mortgage Interest

Mortgage interest relief, which is available at the standard rate, is included as an allowance in the Tax Free Allowance certificates.  From 1 January 2002 the relief will be granted at source by the mortgage provider and will be netted off the monthly mortgage repayment.  This development will also mean that a person will get the full value of the tax credit regardless of whether his/her level of income would be sufficient to absorb the tax relief.  The starting date for relief at source was originally envisaged as 6 April 2001 but was deferred to 1 January 2002 following discussions with the lending institutions and having regard to the technical difficulties which the changeover involved for them.

The cost of this measure will be £6 million in 2002 and in a full year.

Tax Relief for Permanent Health Benefits

With effect from 6 April 2001, contributions to permanent health benefits (income continuance schemes) by PAYE taxpayers will move to a 'net pay' basis i.e. as with the current arrangements for occupational pension schemes the contribution will be deducted from gross salary prior to the application of tax.  This initiative will simplify the relief but continue, in effect, to provide tax relief at the taxpayer's marginal rate.

The cost of this change (which arises from the contribution income concerned no longer being liable for PRSI/Health contributions) is £1.6 million in 2001 and £2.6 million in a full year.

Taxation of Unemployment Benefit.

The special exemption from Unemployment Benefit taxation for systematic short-time workers, which was introduced in the 1994 Finance Act and broadened in the 1995 Finance Act, will be extended for the next tax year up to 31 December 2001.

The cost of this measure is £0.75 million in 2001 and £1 million in a full year.

Increase in specified rate for preferential loans

An employee in receipt of a preferential loan is charged income tax on the difference between the interest actually paid and the amount which would be payable at the “specified” rate of interest.  The specified rates reflect the general rates payable by the customers of credit institutions.  To reflect recent increases in interest rates, the specified rate in respect of home loans will be increased from 4% to 6% while that for other loans will be increased from 10% to 12%, both these changes to take effect from 6 April 2001.

The yield from this measure will be £0.18 million in 2001 and £0.3 million in a full year.

 

Increase in relief for certain charges for domestic refuse collection

In the case of income tax relief for charges for refuse collection which are based either on a “tag” system or which are paid to private concerns, a charge of £50 per annum is assumed within the legislation.  This amount will be increased to £150 with effect from 6 April 2001.  The maximum amount of relief for annual service charges levied by local authorities will remain at £150.

The cost of this measure will be £0.12 million in 2001 and £0.2 million in a full year.

CORPORATION TAX

Corporation tax reductions in 2001

As already provided for in the 1999 Budget and Finance Act, the standard rate of corporation tax for trading income is being reduced from 24 per cent to 20 per cent from 1 January 2001.  This is part of the phased reduction in the standard rate of corporation tax for trading income to a single standard rate of 12½ per cent in 2003.

The cost of this measure (£194 million) is already taken into account in the forecasts of tax revenue.

 

Reduction in the corporation tax rate for small and medium-sized enterprises

In order to assist small and medium-sized firms the 12½ per cent corporation tax rate which will generally apply from 1 January 2003 was brought forward to 1 January 2000 for companies whose total trading income (other than trading income taxable at the special 10 per cent or 25 per cent rates) for an accounting period did not exceed £50,000.  Marginal relief for companies with trading income between £50,000 and £75,000 also applies.  This measure which was introduced last year, is now being extended for companies with a total trading income not exceeding £200,000.  Marginal relief will apply where a total of such income is between £200,000 and £250,000.  These limits will be proportionately reduced where:

·         a company has one or more associated companies, and

·         in the case of an accounting period of less than twelve months duration.

This measure will apply from 1 January 2001.

The cost of this increase in the SME limit is estimated at £20.3 million.

 

Shipping

Profits from shipping which are currently charged to tax at the 10 per cent rate would from 1 January 2001 be charged to corporation tax at the prevailing standard rate of corporation tax - i.e. 20 per cent in 2001, 16 per cent in 2002 and 12½ per cent in 2003.  The 12½ per cent corporation tax rate is now being brought forward from 1 January 2003 to 1 January 2001 for the shipping sector.  The necessary arrangements will be set out in the 2001 Finance Bill.

The cost of this measure is estimated at £0.1 million in 2001, £1.3 million in 2002, £0.2 million in 2003.  There will be no cost thereafter when the general 12½% rate applies.

Amendment of rules in relation to valuation of stock at discontinuance of trading

The 2001 Finance Bill will provide that, where at discontinuance of a trade, stock is transferred (or sold) to a person who carries on a trade, the closing stock at discontinuance is to be valued as follows:

·         where the persons are not connected, at the actual transfer price, and

·         where the persons are connected, at the arm's length price.  However, if the arm's length price exceeds the original cost of the stock and also exceeds the actual transfer price, the parties can jointly elect to have the closing stock valued at the greater of original cost or actual transfer price.

These changes will apply in respect of the sale or transfer of stock on or after 6 December 2000 by an individual, partnership or company.

 

CAPITAL ALLOWANCES

 

Plant and Machinery

The write-off period for the annual wear and tear capital allowances for plant and machinery is being shortened from 7 years to 5 years.  At present the allowance operates on a straight line basis over a seven year time period, i.e. 15 per cent in the first 6 years and 10 per cent in year 7.  In future an allowance of 20 per cent per annum on a straight line basis will be available.  This measure will take effect for expenditure incurred on or after 1 January 2001 and will apply both to the general plant and machinery capital allowances as well as to capital allowances for business motor vehicles (excluding taxi and short-term hire vehicles which will retain their 40% reducing balance arrangement).

This measure will result in a cash-flow loss to the Exchequer of £6 million in 2001, £50 million in 2002, rising to £137 million in 2006, and falling thereafter to nil by 2008.

 

Business Cars

The car value threshold for the restriction of capital allowances, running expenses and leasing expenses is being increased from £16,500 to £17,000.  The new threshold will apply to capital allowances for new cars and allowable expenses for all cars used in the course of a business.  In addition, the existing car value threshold of £10,000, which applies in the case of capital allowances for second-hand cars, is also being increased to £17,000.

Furthermore, a number of simplification measures are being introduced.  These are:

(i) the “one-third” alternative calculation rule for calculating the restriction of car running expenses is being abolished.  Therefore the running expenses will in future be restricted by the proportion which the excess of the cost of the car over the limit bears to the cost of the car.

(ii) only one threshold will apply for the entire accounting period, rather than having two different thresholds applying.  Therefore the taxpayer will no longer have to apportion the motoring expenses between two time periods.  The effect of both of these measures will also reduce the number of calculations required.

All these changes take effect in respect of cars bought and running expenses incurred in accounting periods (bases periods in the case of income tax), which end on or after 1 January 2001.

The cost of these measures are £0.5 million in 2001, £3.5 million in 2002 and £6.0 million in a full year.

 

CAPITAL ACQUISITIONS TAX (CAT)

Treatment of Foster Children for CAT Purposes

The present CAT Group I threshold of £300,000 is the relevant threshold applying for gifts/inheritances from a parent to a natural, adopted or step-child while in the case of such transfers between a foster-parent and foster-child, the Group II threshold of £30,000 or the Group III threshold of £15,000 apply.  As and from 6 December 2000, foster-children will be treated the same as other children for the purpose of CAT i.e. the Group I threshold will apply.  In order to qualify for this equality of treatment, a fostered individual must have been cared for and maintained from a young age up to the age of eighteen for a successive period amounting to 5 years and must also have resided with the disponer (i.e. the foster parent(s)) for this period.

This measure will not involve a significant cost.

 

ABOLITION OF PROBATE TAX

At present, probate tax is charged at a rate of 2% on the net value of non-exempt assets left by a deceased, whether the assets pass under will or intestacy.  Estates with a taxable value of £40,000 or less are exempt from the tax.  Probate tax is being abolished in respect of deaths occurring on or after 6 December 2000.

The cost of this measure is £15 million in 2001 and £30 million in a full year.

 

STAMP DUTY AND CAPITAL GAINS TAX (CGT)

 

Site transfers for residential purposes from a parent to a child

At present, a transfer of a site for residential purposes from a parent to a child is liable to stamp duty on the market value of the site.  There is a 50% reduction on the standard stamp duty rates on transfers between specified close relatives.  For a site, the standard rates currently applying are between 1% and 5% on values between £5,000 and £60,000, while a 6% rate applies on values in excess of £60,000.  In addition, the transfer of the site is liable for CGT based on the market value of the site.

Stamp duty and CGT will no longer apply on the transfer of a site from a parent to a child on or after 6 December 2000 provided it is for the construction of the child's principal private residence and the market value of the site does not exceed £200,000.  It will also be a condition that a parent can only transfer one site to each child for the purposes of this exemption.  The details will be contained in the 2001 Finance Bill.

This measure will not involve a significant cost.

 

PROPOSED TAX TREATMENT OF CREDIT UNIONS

(1)     There will be no change in the exemption of credit unions from corporation tax

(2)     Credit Union members will be liable to pay 20% DIRT on their deposit interest income.  This will be the final tax liability.

(3)     In the case of dividend income, the Credit Union members may opt to

  • retain the present arrangements whereby the Credit Union members are obliged to report the dividends received to the Revenue Commissioners and be subject to tax at their marginal income tax rate, or
  • pay 20% DIRT as at (2) above, or
  • place their shares in new medium-term savings accounts as follows: 
  1. where money is invested in an account for a minimum of 3 years, a tax exemption will apply for the first £375 p.a. in dividends where the maximum dividends payable on the account are £750 p.a.  For those dividends between £375 p.a. and £750 p.a., tax will apply at 20%.
  2. where money is invested for a minimum of 5 years, a tax exemption will apply for the first £500 p.a. in dividends where the maximum dividends payable on the account are £750 p.a.  For those dividends between £500 and £750 p.a., tax will apply at 20%. 

The cost will be assessed in the context of wider discussions with deposit-taking institutions before the Finance Bill.

FARMER TAXATION 

Farmer Stock Relief

The existing general 25 per cent stock relief for farmers and the special incentive stock relief of 100 per cent for certain young trained farmers are being extended from 6 April 2001 for a further two years, subject to this being in conformity with EU State Aid rules.

The cost of this measure will be £1 million in 2001 and £1.5 million in a full year.

 

Improvement of the Capital Gains Tax (CGT) Relief in the case of a Compulsory Purchase Order (CPO).

At present, where land is acquired from a farmer under a CPO for road-building or road widening, roll-over relief for CGT purposes is available where the proceeds of the CPO are reinvested in specified farming assets.  The time period for such reinvestment is 1 year before and 3 years after the date of disposal.

As and from 6 December 2000, this time period will be extended to 2 years before and 4 years after the date of disposal.  In addition, if a farmer has been unable to reinvest in those farming assets by the end of the third year after the disposal, he will be permitted to reinvest in non-farming business assets during the following year for the purposes of roll-over relief.

There is no additional cost for this measure

 

Allowing a longer period for reinvestment for Capital Acquisitions Tax (CAT) purposes

Existing provisions provide that where an individual has obtained CAT 90% agricultural relief on certain farmlands and these lands are subsequently acquired from the individual under a Compulsory Purchase Order (CPO) within 6 years of the transfer, the CAT relief given will be clawed back unless the lands involved are replaced within 1 year by other agricultural property.

It is now proposed that the period for replacement investment will be extended to 4 years, instead of just 1 year as at present where farm lands are compulsory acquired on or after 6 December 2000.

There is no additional cost for this measure

 

 

TAXATION OF LIFE ASSURANCE INVESTMENT

 

Abolition of Stamp Duty on Life Assurance Policies

The 0.1% stamp duty on life assurance policies will be abolished in respect of policies taken out on or after 1 January 2001.

The cost of this measure is estimated at £20 million for a full year.

Tax Rate Applying to the Proceeds of Investment in Life Assurance Companies or Investment Funds located in other EU countries, the other European Economic Area countries and OECD countries with which Ireland has a Double-Taxation Treaty

Where an Irish resident receives the proceeds of such foreign investment products on or after 1 January next, the same tax rate will apply to such proceeds as will apply where an Irish resident invests in an Irish life assurance company or Irish investment fund, provided certain conditions are met.  In the case of such existing foreign products, the investor must declare the investment to Revenue and pay the tax due on the proceeds under the self-assessment income tax rules.  In the case of new such foreign products, the investor and, where it applies, the intermediary must inform Revenue both when making the investment and on receipt of the investment proceeds, with the tax being paid under the self-assessment income tax rules.  Where such conditions are not met, the investor will be liable for tax under the current rules i.e. 40% CGT or in the case of certain offshore funds, the investor's marginal income tax rate.

The cost of this measure is difficult to estimate but is unlikely to be significant.

 

VALUE ADDED TAX

Reduction from 21 per cent rate to 20 per cent

The standard rate of VAT will be reduced from 21 to 20 per cent with effect from midnight on 31 December 2000.  This reduction will apply to all goods and services which are currently subject to VAT at 21 per cent.

This will cost £159 million in 2001 and £191 million in a full year

 

Farmers' VAT Flat Rate Addition

The farmers flat rate is being increased from 4.2 per cent to 4.3 per cent from midnight 31 December 2000. This rate change will ensure that farmers continue to be compensated in full for the VAT they bear on their business inputs.  There will be a corresponding change in the livestock rate.

This will cost £2.35 million in 2001 and £2.83 million in a full year.

 

INDIRECT TAXES

 

Unleaded Petrol

The Budget contains a provision for a reduction of 2p per litre (2.42p VAT inclusive) in the rate of excise duty on unleaded petrol with effect from midnight on 6 December 2000.  The tax take from the price of unleaded petrol will reduce further, by 0.6p per litre on average prices, with effect from midnight on 31 December 2000 reflecting the reduction in the rate of VAT from 21% to 20% with effect from that date.

The cost of this measure is £1.9 million in 2000 and £38.8 million in a full year.

 

Road Diesel

The excise duty on road diesel will be reduced by 6p per litre (7.26p VAT inclusive) with effect from midnight on 6 December 2000.  The tax take from the price of road diesel will reduce further by 0.55p per litre, with effect from midnight on 31 December 2000 to reflect the reduction in the rate of VAT from 21% to 20% with effect from that date.

The cost of this measure is £6.5 million in 2000 and £123.5 million in a full year.

 

Cigarettes

The Budget contains a provision to increase the excise duty on cigarettes by 2.6p (VAT inclusive 3.1p) per packet of 20 (with pro-rata increases on other tobacco products) with effect from midnight on 31 December 2000 to offset the reduction in the rate of VAT from 21% to 20% from that date.

This will yield £7.4 million in 2001 and in a full year.

 

Deferment of the payment of excise duty on alcohols

It is intended to provide in the 2001 Finance Bill for a revision of the current arrangements regarding the payment, to the Revenue Commissioners, of the excise duty in respect of alcohols for the month of December only.  Under the revised arrangements, the excise duty for the full month of December must be paid over by the end of the following January.  This will simplify arrangements and be convenient for the trade.  The revised arrangements will take effect from December 2001

The measure will result in a temporary shortfall of £71 million in 2001; the amount to be recouped in the following year.

 

Vehicle Registration Tax (VRT)

It is intended to provide in the 2001 Finance Bill for a refund of 50% of the amount of VRT due at the appropriate cc rate to purchasers of 'hybrid' motor vehicles. The scheme of refund of VRT will be for a period of two years. The definition of 'hybrid' motor vehicle will be provided in the Finance Bill along with the period of operation of the scheme.

Assuming sales of 200 units per year, it is estimated that the cost will be in the region of £0.75 million per annum.

 

PRSI AND LEVIES

PRSI Changes

Employee

As from 6 April 2001, the PRSI contribution ceiling will increase from £26,500 to £28,250.

This increase underpins the 2001 Estimates.

 

Employer

As from 6 April 2001, the contribution ceiling for Employer PRSI will be abolished – as is normal practice, an increase in the ceiling, in line with movements in earnings was factored into the 2001 estimates.  No change is being made either to the Employer Contribution Rates or to the Employer Lower Rate Threshold.

 

Employee

As from 6 April 2001 the PRSI contribution rate for employees (Classes A and H) will be reduced by 0.5% to 4% and 3.9% respectively.  There are no changes to the employee allowance of £100 per week or the exemption threshold of £226 per week.

Self-employed

As from 6 April 2001, the contribution ceiling for self-employed and proprietary directors is being abolished.  In tandem with this development the PRSI rate for the self employed and proprietary directors will be reduced from 5% to 3%.

As from 6 April 2001, the annual PRSI free allowance of £1,040 will be abolished.

The minimum contribution for self-employed persons is being reduced from £215 p.a. to £200 p.a.

This combined effect from these measures is a cost of £7 million in 2001 and an increase in the yield of £117 million in a full year.

 

Calendar Year

The alignment of the income tax year with the calendar year will cause a cashflow loss to the Social Insurance Fund of £20 million in 2001 and £5 million in 2002.  There will also be a cashflow loss in terms of Health Levy receipts of £12 million in 2001 and an increase in receipts of £4 million in 2002.

 


PART II

SOCIAL INCLUSION MEASURE

NOTE FOR INFORMATION

The sums set out below should be read in conjunction with the amounts provided in the recently published Abridged Estimates Volume.

 

 

SOCIAL WELFARE

The total cost of the Social Welfare improvements is £586.6 million in 2001 and £850 million in a full year.

 

Earlier Dates of Payment

Weekly payment increases will take effect 4 weeks earlier from the first week of April 2001.  From January 2002 onwards, payment increases will apply from the start of the year.

Child Benefit increases will apply 3 months earlier and will be payable from June 2001.

 

Social Welfare Rates

Maximum weekly personal rates for all old age and related pensions will be increased by £10, with proportionate increases for pensioners on reduced rates, from the first week of April 2001.

There will be a special increase of £2.90 per week in the over 66 rate of Widow(er)'s (Contributory) Pension and Deserted Wife's Benefit as part of the phased increase in these payments to the Old Age (Contributory) Pension rate, giving a total increase of £12.90 per week in 2001.

Other personal rates will be increased by £8 per week, from the first week of April 2001.

In general, the Qualified Adult Allowance will continue to be increased to make progress towards 70% of the personal rate.  In 2001, the increases will be;

·         £9 per week for Old Age (Non-Contributory) Pension for those aged under 66

·         £8 per week for Old Age (Contributory) and Retirement Pensions for those aged under 66

·         £7 per week for all other payments.

The rate of Qualified Adult Allowance for those aged 66 and over will be increased on a phased basis to bring them up to the Old Age (Non-Contributory) Pension rate, with proportionate increases where the pensioner is on a reduced pension.  The 2001 increases will be:

·         £15 per week for Old Age (Contributory and Non-Contributory), Retirement, Blind Person's and Invalidity Pensions.

The above increases will cost £330.8 million in 2001 and £439.4 million in a full year.

Child and Family Income Support

Child Benefit will be increased by £25 per month for each of the first and second children, from £42.50 to £67.50 per month; and by £30 per month for each of the third and subsequent children, from £56 to £86 per month, from June 2001.

These increases will cost £191.8 million in 2001 and £328.8 million in a full year.

Family Income Supplement income thresholds will be increased by £25 per week, from April 2001.

This measure will cost £9.8 million in 2001 and £13 million in a full year.

The duration of Maternity and Adoptive Benefits will be extended by 4 weeks from 14 to 18 weeks.

The minimum rate of Maternity and Adoptive Benefits will be increased by £8 to £98.70 per week and the maximum rate by £10.20 to £183 per week, from the first week of April 2001.

These measures will cost £12.1 million in 2001 and £16.2 million in a full year.

 

Carers

The £75 (single)/£150 (couple) weekly income disregards for means assessment for the Carer's Allowance Scheme will be increased to £125/£250, from April 2001.

From June 2001, the Respite Care Grants will be increased from £300 to £400, and two Grants will be paid in respect of a Carer who is looking after two or more persons.

The cost of these measures will be £16.7 million in 2001 and £21.2 million in a full year.

Disability

A full rate Disability Allowance payment will be made where the person's partner is in receipt of any other social welfare payment, from April 2001.

From April 2001, eligibility for the Living Alone Allowance (£6 per week) will be extended to recipients of Invalidity Pension, Disability Allowance, Unemployability Supplement and Blind Person's Pension who are under 66.

These measures will cost £3.4 million in 2001 and £4.5 million in a full year.

Older People

Persons aged 70 and over will be entitled to Free Electricity Allowance, Free Telephone Rental Allowance and Free Television Licence, regardless of their circumstances, effective from May 2001.

From April 2001, a special allowance of £10 per week will be introduced for social welfare pensioners resident on off-shore islands.

These measures will cost £9.8 million in 2001 and £14.5 million in a full year.

 

Fuel Allowance

The period in respect of which the Fuel Allowance is payable will be extended by 3 weeks to cover the period from the first week in October to late April.  This change will take effect from April 2001 such that payment for the current winter will continue for two extra weeks.

The weekly income disregard for Fuel Allowance will be increased from £30 to £40, from October 2001.

These measures will cost £5.6 million in 2001 and £6 million in a full year.

 

Employment and Educational Supports

Funding will be allocated for a range of extensions and improvements to the Employment and Educational Support Schemes administered by the Department of Social, Community and Family Affairs with a focus on categories of particular disadvantage.

The upper ceiling for tapered Qualified Adult Allowance arrangements will be increased from £135 to £145, from April 2001.

These new measures will cost £1 million in 2001 and £1.1 million in a full year

Voluntary, Community, Family and Information Services

Additional funding will be provided for the scheme of grants for Marriage, Child and Bereavement Counselling Services, as well as support for the Rainbows Project, Turning Point and the start-up costs of a Longitudinal Cohort Study of Children.

Additional funding will be allocated to the Community Development Programme, the Money Advice and Budgeting Service, the Combat Poverty Agency and Comhairle.

This package of measures will cost £4.7 million in 2001.

 

EDUCATION AND SCIENCE

Improved retention of pupils in school

An additional £5m is being provided to intensify efforts to ensure that pupils complete their schooling.

This will cost £5.0 million in 2001.

 

School transport

An additional £2.85 million is being provided to allow for the following enhancements to the school transport scheme:

-          a reduction in qualifying distance for primary pupils over 10 years of age from 3 to 2 miles in line with that which applies for under 10's;

-          a reduction in the qualifying distance for Remote Area Grants from 3 to 2 miles in the case of post-primary pupils;

-          a reduction in the minimum number of primary pupils needed to establish a service from 10 to 7 pupils;

-          a reduction in the threshold for maintenance of a service to 4 eligible pupils provided there is a minimum of 6 fare-paying pupils also using the service;

-          an increase in the rates of the Remote Area Grant;

-          a reduction in the maximum combined travelling/waiting time for post-primary pupils; and

-          a reduction in the loading capacity of some vehicles in the scheme.

This will cost £2.85 million in 2001 and a similar amount in subsequent years.

 

Grants to schools to tackle disadvantage

An additional £0.75 million is being allocated so that extra grants to address disadvantage can be paid to all primary schools identified in a recent Education Research Centre survey as having disadvantage pupils.

This will cost £0.75 million in 2001.

 

Centre of Excellence for children with visual impairment

An additional £0.5 million is being allocated towards the establishment of a Centre of Excellence for Children with Visual Impairment.

This will cost £0.5 million in 2001.

 

Extension of Maternity Leave

Additional funding is being provided to facilitate the introduction of an extra 4 weeks Maternity/Adoptive leave in the Education Sector in 2001.

The cost of this measure will be £0.65 million in 2001.

 

HOUSING

Housing Management Initiative

Improving the management of local authority housing estates including promoting greater tenant involvement has been a priority now for some years.  A special allocation of £1.5 million is being made which will enable local authorities to fund the employment of a limited number of staff to work with tenants/residents groups as well as addressing the training needs of their own staff in this area.  Some of this funding will also be allocated to the staffing and evaluation costs of proposed pilot schemes of direct arrangements between local authorities and private landlords/owners to accommodate households eligible for local authority housing who would otherwise obtain SWA rent supplement. 

This will cost £1.5 million in 2001.

 

Threshold

Additional funding of £40,000 is being provided to assist Threshold, the housing research and advice body.

This will cost £0.04 million in 2001.

 

DISABLED

Increased Training Allowance to Disabled Trainees

The Department of Enterprise, Trade and Employment will shortly be changing the manner in which training allowances are paid to trainees with disabilities.  As part of this, trainees with disabilities will receive the training bonus of £25 per week currently paid to the long-term unemployed.

This will cost £2.55 million in 2001 and in a full year.

 

PPF Commitments on training and employment initiatives for the disabled

This funding will enable commitments made in the PPF to be delivered.

This will cost £1.7 million in 2001 and in a full year.

 

Other Social Inclusion Measures

At the initiative of the Tánaiste, support for a range of other Social Inclusion projects is being provided via the Department of Enterprise, Trade and Employment

This will cost £0.58 million in 2001.


HEALTH AND CHILDREN

Gross expenditure on the Health and Children vote, and the number of health service employees (in whole-time equivalent), have evolved as follows since 1990:

1990                             £1,491 million               58,735 employees

1996                             £2,470 million               65,755 employees

2001 Post-Budget        £5,299 million               86,500 employees (estimated)

Gross spending on health will increase from just under £4.5 billion in 2000 to £5.3 billion next year.  Day-to-day health spending will, in broad terms, be distributed as follows across the major programmes in 2001:

·         £1,750 million on public hospitals

·         £800 million on services dedicated to the needs of older people

·         £500 million on the GMS (Medical Card) Scheme, and a further £200 million on Community Drugs Schemes

·         £450 million on intellectual disability services

·         £350 million on psychiatric services

·         £200 million on physical disability services

·         £200 million on child support services

·         £200 million on community protection measures such as vaccinations, food safety and health promotion

·         £100 million on dental and ophthalmic services.

In this Budget, additional funds of £194 million will be allocated to health service developments, of which the following relate to Social Inclusion measures:

Health Programme

Cost (£m)

Acute Hospital Services

 

38.5

-    Cancer Strategy

13.5

-    Breast Screening/Treatment

1.5

-    Waiting List Initiative

11.0

-    Increased Bed Capacity

7.0

-    Pre-Hospital Services

2.5

-    Renal Services

2.0

-    Medical Laboratory Accreditation

1.0

Older People

 

30.4

-    General Services

14.4

-    Nursing home subvention

9.0

-    Medical Card for all aged 70 and over from 1 July 2001

7.0

Intellectual Disability

28.0

Physical and Sensory Disability (of which Training £5m)

17.0

Palliative Care

3.0

Child Welfare (including foster care £9m and homelessness £5m)

16.5

Mental Health

12.0

Dental Services

6.4

Drug Addiction Services

5.0

Cardiovascular Strategy

5.0

Primary Care Measure (including GMS Pilot Projects)

3.0

Adult Homelessness

2.0

Support Services to victims of violence against women

1.5

Health screening of Asylum Seekers

1.0

Travellers Health

1.0

Health Research Board

3.0

Voluntary notification for child minders of 3 or fewer children

1.2

Increase in health allowances in line with social welfare rates

3.0

Extension of Maternity Leave

3.0

These measures will cost £180.5 million in 2001 and £340 million in a full year.

 

ENTERPRISE TRADE AND EMPLOYMENT

Childcare Training measures

Funding is being provided which will address shortages in the supply of childcare workers by providing FÁS training for 300 persons wishing to work in the childcare sector.

This will cost £0.4 million in 2001 and in a full year.

 

TOURISM, SPORT AND RECREATION

 

Drugs Initiative

Additional funding of £2 million is being provided for the National Drugs Strategy, which will increase the 2001 allocation to £17 million.  This finance will be used to implement the new action plans of the Local Drugs Task Forces.

This will cost £2 million in 2001 and 2002 and 2003.

 

JUSTICE, EQUALITY AND LAW REFORM

Extension of Maternity Leave

Additional funding is being provided to facilitate the introduction of an extra 4 Weeks maternity/adoptive leave for the Garda Síochána in 2001.

The cost of this measure will be £0.15 million in 2001


PART III

OTHER CURRENT EXPENDITURE MEASUR

NOTE FOR INFORMATION

The sums set out below should be read in conjunction with the amounts provided in the recently published Abridged Estimates Volume.

 

HEALTH AND CHILDREN

Health

£8.1 million is being provided for Nurse Training; £2 million to control MRSA (an antibiotic-resistent infection); £1 million for the Office Of Tobacco Control; £1 million to support insurance cover for Hepatitis C patients, £1 million to strengthen National Food Safety measures; and £0.6 million for the Commission on Assisted Human Reproduction.

These measures will cost £13.72 million in 2001 and £27 million in a full-year.

Technical Adjustments

Provision has also been made for various technical adjustments associated with the emerging outturn for the Health and Children Vote in 2000, and the alignment of the income tax year with the calendar year (which affects Health Levy Receipts).

These will cost £62.4 million in 2001 and £78 million in a full year.

 

ENTERPRISE TRADE AND EMPLOYMENT

Return to Work Programme

Additional funding is being provided to allow FÁS to provide 200 additional places on its Return to Work Programme.  This programme provides training to improve the skills of women returning to the labour force.

This will cost £0.6 million in 2001 and in a full year.

 

Increase accommodation allowances paid to apprentices

The increase in apprentice numbers has resulted in many having to attend off-the-job training courses some distance from home.  This funding will increase the accommodation allowance from £27.50 per week to £55 per week and will ensure that apprentices can attend scheduled training courses

This will cost £3.6 million in 2001 and in a full year.

 

Consumers Association of Ireland

Funding is being provided to enhance the capacity of the Consumer Association of Ireland to act as a consumer 'watchdog' and advisory body.

This will cost £0.05 million in each of the years 2001, 2002 and 2003.

DÍON

Funding is being provided to improve the level of support to voluntary organisations who provide advisory and welfare services for Irish emigrants in Britain.

This measure will have a once-off cost of £1 million in 2001.

Promotion of Enterprise Education at second level

Funding is being provided to develop the entrepreneurial and business skills of 2nd level students in Transition Year.

This measure will cost £0.25 million in 2001.

 

Newfoundland and Labrador Business Partnerships

Funding is being provided for the establishment of a partnership to promote joint ventures, technology transfers and trade between the Governments of Newfoundland and Ireland.

This measure will cost £0.25 million in 2001.

 

TOURISM, SPORT AND RECREATION

 

Tourism Marketing

Funding of £5 million is being provided to enhance Bord Failte's general tourism marketing effort, including addressing emerging challenges in the British market, furthering wider regional spread and supporting smaller tourism enterprises.

A further £5 million is also being provided to extend niche product or special interest marketing in such areas as golf, cruising, walking and angling tourism.

This will cost £10 million in 2001.

 

International sporting events

Funding is being provided for Bord Failte to support efforts to attract major sporting events with tourism potential for Ireland.  £2.5 million has been included in the estimates for this purpose and it is now proposed to double that allocation to bring it up to £5 million annually from 2001 to 2005.

This will cost £2.5 million in 2001 and in a full year.

 

Irish Sports Council

The Irish Sports Council was established to encourage the promotion and development of sport by increasing participation levels and improving the levels of performance.  It recently published its Statement of Strategy “A New Era for Irish Sport” which charts its priorities for the next three years.  The Government intends to double the annual budget of the Sports Council over the next four years to £20 million and, as a first step, an additional allocation of £2.5 million is now being.

This will cost £2.5 million in 2001, £5 million in 2002 and £7.5 million in 2003.

 

Youth field sports

Funding is being provided, through the Irish Sports Council, for the development of programmes specifically designed to encourage and promote greater underage participation in soccer, rugby, hurling and football by assisting the Football Association of Ireland (£1 million), the Gaelic Athletic Association (£1 million) and the Irish Rugby Football Union (£0.5 million).

This will cost £2.5 million in 2001.

 

Older people and sport

Funding is also being provided to encourage and promote greater participation by older people in recreational sport and activities.  £0.5 million will be provided through the Irish Sports Council to help fund initiatives in this area.

This will cost £0.5 million in 2001.

 

EDUCATION AND SCIENCE

International Science Olympiad

Funding of £0.25 million is being provided towards the cost of an International Science Olympiad for Schools in 2001.

This will cost £0.25 million in 2001.

ARTS, HERITAGE, GAELTACHT AND THE ISLANDS

Comhaltas Ceoltóirí Éireann

An additional grant is being made towards the funding of events to celebrate the 50th Anniversary of Comhaltas Ceoltóirí Éireann.

This will cost £0.15 million in 2001.

 

Ark Cultural Trust for Children

A once-off grant is being made to the Ark Cultural Trust ,which was set up to raise funds for The Ark, a Cultural Centre for Children. Funding will be used to develop outreach projects to extend the activities of The Ark to a wider audience of children.

This will cost £1 million in 2001.

 

Arts Council Celebration

A grant is being made to the Minister for Arts, Heritage, Gaeltacht and the Islands, to sponsor events aimed at celebrating the first 50 years of the Arts Council.

This will cost £0.35 million in 2001.

 

MARINE AND NATURAL RESOURCES

Additional funding is being provided to An Bord Iascaigh Mhara (BIM) for the development of inshore fisheries, a deep water species exploratory development programme, a market development strategy and aquaculture.

This will cost £4 million in 2001.

 

FOREIGN AFFAIRS

Funding is being provided for the Atlantic Corridor Project, the aim of which is to assist in the setting up of an international trade and education alliance between public and private sector interests on both sides of the Atlantic.

This will cost £0.2 million in 2001.

 

AGRICULTURE FOOD & RURAL DEVELOPMENT

Young Farmer Training

Additional funding is being made available for the payment of a trainee allowance of £150 per week by Teagasc, to farm apprentices and second-year agricultural students while on block release courses.

In addition, the daily allowance for Certificate in Farming students at local centres is to be doubled to £7.00 per day.

These measures will cost £0.235 million in 2001 and subsequent years.

 

JUSTICE, EQUALITY AND LAW REFORM

Additional funding is being provided to meet the full start up and operating costs of the Human Rights Commission.

This will cost £0.4 million in a full year.

 

PUBLIC ENTERPRISE

Road Haulage

Additional funding is being provided to assist the Road Haulage Industry to provide a professional service to its members and for a significant increase in the Department of Public Enterprise enforcement and development capacity.

This will cost £0.3 million in 2001

 

PART IV

CAPITAL EXPENDITURE MEASURES

 

NOTE FOR INFORMATION

The sums set out below should be read in conjunction with the amounts provided in the recently published Abridged Estimates Volume.

Measure

Department

2001 Cost

2002 Cost

 

£m

£m

Rehabilitation Centre, Cuan Mhuire, Athy

Health and Children

0.300

1.100

Science laboratory equipment for second level schools

Education and Science

3.000

Limerick Youth Service

Education and Science

1.000

Computers and associated aids for the special education sector

Education and Science

1.250

Computer Equipment Fund for Special Needs Pupils

Education and Science

0.500

Clonliffe College Library

Education and Science

0.400

Additional funding for Disabled Persons and Essential Repairs Grants

(Social Inclusion Measure)

Environment & Local Government

5.000

5.29

St. Catherine's Foyer Centre project to provide accommodation for the homeless.

(Social Inclusion Measure)

Environment & Local Government

1.000

Electronic Voting & Counting Project

Environment & Local Government

0.500

Restoration of Christ Church Cathedral

Arts, Heritage, Gaeltacht & the Islands

0.250

All Hallows College Archive

Arts, Heritage, Gaeltacht & the Islands

0.050

Refurbishment of St. Aidan's Cathedral, Enniscorthy

Arts, Heritage, Gaeltacht & the Islands

0.040

Refurbishment and improvement of Irish College in Rome, Visitors Centre

Office of Public Works

0.200

Assistance with the cost of refurbishing the Auditorium of Liberty Hall

Office of Public Works

Capital Works to Dublin Zoo.

Office of Public Works

2.000

Development of Civil Service childcare facilities

Finance

5.000

5.000

Galway Science and Technology Festival

Enterprise Trade & Employment

0.250

Community Training Workshops

Enterprise Trade & Employment

2.000

Development of Rosaveal Fishery Harbour

Marine & Natural Resources

7.000

Additional funding for Marine Access Infrastructure

Marine & Natural Resources

4.500

Additional funding for Sports Capital Programme

- Fraher Field

- Rosgreen Development Association

- Young Munster Rugby Football Club

- Balbriggan Combined Clubs

- Tolka Rovers Soccer and Sports Club

- Killester Sports and Social Club

- Dressing Rooms at 15 Acres, Phoenix Park

Tourism, Sport & Recreation

0.745

0.050

0.012

0.100

0.058

0.100

0.025

0.400

Drugs Initiative

Tourism, Sport & Recreation

3.000

3.000

Kerry Diocesan Youth Centre

Justice, Equality & Law Reform

 

0.200