A Budget for Everyone
Personal finance Barry McCall explores how the new budget is good for everyone. We also look at the launch of the St. Patrick's credit union revamped website.
Brian Cowen's second budget brought good news to just about everyone including working people, the very young, the very old and the vulnerable in society. In what was seen as the most family-friendly budget in many years, the finance minister delivered increases in child allowances, supplements for the under-6's to assist with childcare costs, substantial increases in pensions and social welfare, and he increased personal tax credits and widened the bands as well.
For the majority of people it is the personal tax changes which are most important. The first major change here is that the standard rate tax band has been widened from €29,400 to €32,000 for single persons, from €38,400 to €41,000 for married persons with one income, and from €58,800 to €64,000 for married couples with two incomes.
This substantially lowers the amount of a person's income on which they pay tax at the 42% rate. For example, a single person earning €40,000 a year or more will save €572 a year as a result of this.
Personal tax credits have been increased by €50 a year for single persons and €100 for married couples while the employee tax credit has been increased by €220.
The net result of these changes is that a single person earning €40,000 a year will be €70 per month better off, a married couple with one income of €60,000 a year will be €68 per month better off, and a married couple with two incomes earning €80,000 a year will be €140 per month better off.
Also of interest to many people is the fact that the standard rated allowance for trade union dues has been increased from €200 to €300 a year. If you are paying more than €200 in union dues make sure you claim for the higher amount.
No cause for alarm on pensions taxation
Some alarm was expressed at Minister Cowen's announcement that Approved Retirement Funds are to be subject to income tax. This should not be a major cause of concern, however. These funds are only available to either self-employed persons or those with substantial additional voluntary contributions in their occupational scheme. They are akin to a unit-linked fund and retired persons can invest a proportion of the pension fund available to them to generate pension income.
However, in a small number of cases people have used these funds as a means of deferring tax rather than generating retirement income. To combat this the minister has introduced a scheme whereby if less than 3% of the fund is distributed each year the Revenue Commissioners will treat it as if a full 3% had been and will apply income tax on that amount. Anyone taking the full 3% or more will not be affected by this measure so there is no real cause for alarm.
Web launch - St. Patrick's Credit Union
St. Patrick's Credit Union is delighted to announce that it is launching a website in late January 2006. The address will be www.stpatrickscu.ie.
The website will give its members access to information about the various products and services that are available. It will also enable them to view their account balances and previous transactions on each account and have the facility to apply for loans online.
A comprehensive source of information will be available on loans, shares, budget accounts, free loan and share insurance and foreign exchange, with the facility to drawdown/print off all necessary application forms. There will also be a loan calculator which will enable members to view the repayments on various amounts of loans.
By supplying a PIN number, members will be able to view their account balances and can print off statements on each account. The budget account section will contain an up-to-date balance on each item/code so members can clearly see how much of each item/code is left to draw down.
There will be a facility for members to apply for loans online, which will be of particular advantage to those members who are unable to call into the office.
The legal requirement of members having to complete a Credit Agreement for every approved loan is still there. This means that an approved online loan application will result in the member receiving a Credit Agreement and a paper copy of the loan application for signing.
The Board of Directors of St. Patrick's Credit Union trusts that this new fantastic service will be of immense benefit to every member, and also hopes that it will encourage more ESB staff and pensioners to join the Credit Union.
For information on loans and repayments at St. Patrick's Credit Union please contact Simon Dunne on 01-6325100.
The answer is both yes and no. Yes, people over the age of 65 are entitled to an additional tax credit of €250 a year for a single person and €500 for a married couple. This is a significant amount but it is not given automatically.
You must inform the Revenue Commissioners that you have reached the age of 65 and are entitled to the additional credit. Anyone who is entitled to this allowance and has not been receiving it should contact the Revenue Commissioners and they will receive the full backdated amount owing.
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EM once again has a copy of the ever-popular software package 'Microsoft Money' to give away.
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In the new budget, the standard rate tax band for married persons with two incomes was increased
from €58,800 to …
A €64,000
B €69,000
C €71,000
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