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IFA Budget Reports

IFA Budget reports provide IFA members with a summary of the main decisions affecting agriculture and farm families in each Budget.

The reports provide an overview of changes in government expenditure in relation to agriculture; relevant taxation and social welfare measures; and public finances and national economy.

The economic outlook for 2019 remains positive, with GDP expected to increase by 4.2%. The Government presented a total budget allocation of €66.5bn for the 2019 budget, comprising €59.2bn to current expenditure and €7.3bn on capital expenditure. The estimates in the summer statement identified €800 million allocation for Budget 2019, an additional €700 million was raised to facilitate the overall €66.5bn spending. This also includes personal tax packages valued at €291m in 2019.

The Agriculture Budget has been increased from €1,532m to €1,596m, an increase of 4.2%. Expenditure on farm schemes under the Rural Development Programme will be €648m in 2019 and increase of €22m from 2018.

Farm Scheme Funding

Agri-environment measures
€203m has been allocated for the Agri-environmental GLAS scheme in 2019. In addition, €11m has been allocated to the Organics scheme with the addition of €1.2m for the development of the Organics sector. Locally Led Schemes, including the Burren, Hen Harrier, Pearl Mussel and other schemes will be worth approximately €15m. This gives a total estimated allocation to environmental measures in 2019 of €227.2m.

Sheep Welfare Scheme
€19m allocated for the Sheep Welfare Scheme for 19,000 farmers.

Areas of Natural Constraint
An additional €23m has been allocated to the ANC scheme for 96,000 farmers to bring the total allocation to €250m. Details of how the additional funds will be distributed will be finalised in advance of the 2019 scheme.

Beef Data and Genomics programme
€44m is allocated under the BDGP for 24,000 farmers in the scheme.

Beef Environmental Efficiency Pilot (BEEP) Scheme
A new BEEP scheme worth €20m has been introduced for suckler farmers. The scheme will involve the recording of data on weights for cows and calves.

Knowledge Transfer
Funding of €23m for 19,000 farmers has been allocated for KT programmes for 2019

TAMS
€70m has been allocated for on-farm capital investment under TAMS in 2019.

Forestry
€103.5m has been allocated for existing forest premiums as well as supporting an additional 8,000 ha of new planting and the construction of 125km for forest roads.

Horticulture
An increase of €1m to €6m has been provided for the development of the Commercial Horticulture Scheme.

State Agencies
€46.6m has been allocated to Bord Bia for food and marketing promotion.
€67.2m Horse and Greyhound Fund, of which €16.8m has been allocated to Bord na gCon

Brexit Loan Schemes
€27m allocated in Brexit related supports for the food industry as follows:

  • €13m in supports for food industry competitiveness and innovation;
  • €3m for Artisan and Micro food and beverage programmes through the Leader Programme and LEAN;
  • €5m for Bord Bia for food marketing and promotions;
  • €6m in funding to progress an €8 million Food Innovation Hub in Teagasc Moorepark, of which €2m was provided in 2018;
  • €7m for staff and IT costs arising from Brexit preparedness measures.

Agricultural taxation

Income averaging
The restriction relating to farmers with off-farm self-employed income is being removed. Income averaging allows eligible farmers to calculate their taxable income as the average of their income in the current year and the previous 4 years, over a 5 year cycle.

Stock relief
Stock relief for farmers is being extended for 3 years until the end of 2021. This includes 3 measures:
– the general 25% stock relief on income tax
– the 50% stock relief for registered Farm Partnerships
– the 100% stock relief for certain Young Trained Farmers.

Stamp Duty relief
Stamp duty relief for Young Trained Farmers is being extended for a further 3 years until 31/12/2021.

General Taxation

Earned Income Tax Credit
For self-employed tax payers, including farmers, who do not receive the PAYE Tax Credit (€1,650), the Earned Income Tax Credit of €1,150 is being increased by €200 to €1,350 from 2019.

Tax bands
The Standard Rate Cut Off Point – the point at which income attracts the higher rate of income tax – will rise in 2019 by €750. The cut-off point for a single earner will be €35,300, for a married couple (single income)will be €44,300.

Universal Social charge
The rates of USC are being amended as follows:
The 2% rate band is increased at the upper end by €502 to €19,874.
The 4.75% rate is to reduce to 4.5%

Tax credits & reliefs
The Home Carer Credit is to increase by €300 to €1,500.

Vehicle Registration Tax
A 1% VRT surcharge is being brought in for diesel passenger vehicles registered from 1/1/2019.
The VRT relief for conventional hybrids and plug-in electric hybrids is being extended until the end of 2019.

Capital Acquisitions Tax
The Group A tax free threshold, which applies primarily to gifts and inheritances from parents to children, is being increased from €310,000 to €320,000. This applies to gifts or inheritances received on or after 10th October 2018.

Employers’ PRSI
From 1/1/2019 the weekly income threshold for the higher rate of employers’ PRSI will increase from €376 to €386.

VAT
VAT rate applying to tourism activities will increase from 9% to 13.5% from 1/1/2019

Social Protection

Payment rates
Payment rates are to increase by €5 per week for all weekly social welfare payments including Farm Assist,Rural Social Scheme, Job-Seekers Allowance and Benefit, State Contributory and non-contributory Pension, Disability Allowance, and Carers Allowance.

There will also be a €2.20 increase for each qualifying dependent child under 12 years of age and €5.20 for children 12 years or more. These increases will take effect from end of March 2019.

A Christmas Bonus of 100% of the weekly payment will be paid to social welfare recipients in 2018.

Other Social Welfare Measures
A new paid parental leave scheme will be introduced in November 2019 to provide two extra weeks leave to every parent of a child in their first year.
The earnings disregard for the One Parent Family Payment will be increased next March.
There will be a €25 increase in both Back to School Clothing and Footwear Allowance rates.

Minimum Wage
The National Minimum Wage will increase from €9.55 to €9.80 from 1st January 2019.

Job Seekers Benefit for self employed
Self-employed to become eligible for Jobseeker’s Benefit – to be introduced in Q4, 2019. This is a further extension of social welfare benefits to the self-employed based on their Class S PRSI contributions. The details of the scheme of are yet to be finalised.

New Social Insurance Parental Benefit Payment
New payment for employees and the self-employed to be paid for two weeks for each parent – to commence in November 2019.

Health
• Prescription charges for all medical card holders under 70 will reduce from €2.00 per item to €1.50 per item.
• The threshold for the Drugs Payment Scheme will reduce from €134 to €124.
• €75m has been allocated to the National Treatment Purchase Fund for next year (€55m in 2018).
• €25 increase in weekly income threshold to qualify for GP visit cards.

Rural and Community Development

An additional €53m in capital is allocated next year to fund the first round of projects under the new Rural Regeneration and Development Fund.
Supports include: Leader, Rural Recreation and Community Development. Specifically, €55m is allocated to the Rural Regeneration and Development fund.

Walk Scheme
An extra €2m for the expansion of the Walks Scheme and €1.2m for the Peace Programme.

Economic growth (GDP): GDP growth of 7.5% in 2018 with projected growth of 4.2% in 2019.

Government deficit: The projected deficit for 2018 is 0.1% of GDP and 0% in 2019.

Unemployment rate: Currently at 5.8% and projected to fall to 5.2% on average in 2019.

Government debt: GDP ratio: This is projected to reach 64% of GDP by end 2018, falling to 61.4% in 2019.

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