Personal Finance

Barry McCall breaks down the recent budget and some easy ways to keep your New Year's resolutions from St. Patrick's Credit Union.

Something for everyone

Budget 2007 delivered pretty much on expectations. In what some commentators described as "the most leaked Budget in history," finance minister Brian Cowen managed to spread billions in extra benefits to various sectors of society whilst also putting away several more billion euro of the record surplus for the proverbial rainy day. Prudence and generosity mixed together in the one package! How finance ministers of years gone by must have cast envious glances in Mr Cowen's direction on Budget Day.

The main points of the budget have been well-covered by now - a 1% cut in the top rate of tax with a further 1% to come in Budget 2008, an increase of €130 in the personal tax credit, a rise of €270 in the PAYE tax credit, and an increase of €2,000 in the standard rate tax band were the main points for PAYE taxpayers.

There was also good news for first-time house buyers, and those who bought their first home within the previous seven years, with a doubling of the interest allowable for tax relief. Other homeowners benefited with an increase in the ceiling for their tax relief.

And, of course, pensioners received a much-needed and very welcome increase to €209.30 per week for the contributory old age pension.

But there were some other interesting aspects of the budget which didn't command as much attention as these headlining measures. Very welcome will be the announcement that, from this year, all age-related tax credits will be credited automatically, so long as an accurate date of birth is held by either the Revenue Commissioners or the Department of Social and Family Affairs. This will certainly clear up a lot of problems experienced by pensioners who have had difficulties in the past in obtaining their age-related credits.

Another problem area for many older people was also addressed in the Budget. This relates to interest on bank accounts. Many older people and incapacitated persons are not subject to DIRT tax on their deposit accounts so long as their income remains below certain thresholds. Up until now they had to go through a rather cumbersome process to reclaim the tax and many did not do so. Now, however, the banks will be allowed to operate DIRT-free accounts for such people and this will mean that they no longer have to go through a reclaim process.

Further good news came for these people with the increase in the tax exemption threshold from €7,000 to €19,000 per annum for single persons and to €38,000 for married couples. There was good news for those still at work as well. Tax credits for trade union subscriptions will be granted automatically from this year. Trade unions will send lists of members to the Revenue Commissioners and they will then apply the credit to taxpayers.

Another Budget announcement which went unnoticed by many but will be very important for a large number of people is the changes planned for tax relief on various medical expenses. It is estimated that more than €50 million in medical expenses tax relief and repayments go unclaimed every year simply because people don't keep their receipts and find the claims process overly bureaucratic. Minister Cowen announced that from 2008 it is planned to move to a system of automatic repayments in respect of nonreimbursed hospital expenses and prescribed drugs pharmacy costs. If all of these various measures work out in practice as well as they sound in theory, they could put a little more money in a lot of pockets over the next few years.

St. Patricks Credit Union - New Year Resolutions

This time of the year is when a lot of us make New Year resolutions. We make ourselves promises about how we hope to live for the next 12 months and beyond.

One of the most important resolutions we all should make is a financial one, and one that is sure to save us money, time and stress i.e. to use St. Patrick's Credit Union more often for our financial requirements. And the reasons are very simple:

Loans

• One of the cheapest personal lending rates in the country at just 6.5% p.a.
• Easy application process through our website www.stpatrickscu.ie
• Flexible terms and conditions
• Applications judged on repayment capacity and not on amount held in shares
• Facility to top-up your loan without clearing existing balance

Budget Account

An excellent service which enables our members to meet their ongoing household bills such as mortgage, ESB, telephone, service charges etc. by spreading the cost over a 12 month period, thereby avoiding the hardship in some months when a lot of bills fall due at the same time.

Free Insurance Cover

Our members are entitled to free insurance cover (Life Cover) on loans and shares. No Bank or Building Society offers such a service.

Foreign Exchange

A convenient way of ordering your foreign currency, commission-free, through our arrangement with Thomas Cook.

So make that resolution now and stick to it - "I will use St. Patrick's Credit Union more often this year and save myself a lot of money and stress."

For further information or to make an application please see our website www.stpatrickscu.ie or contact the office on 01-6325100.