The Government has announced the details of its €11bn Budget 2023 package. The Budget, which was brought forward this year, includes a broad range of initiatives to support the public and businesses with increasing energy costs.

The following measures may be of particular note for Employers:

Changes to Income Tax

Incomes above €40,000 will be subject to the top rate of tax of 40% effective from January 2023. The personal tax credit will rise from €1,700 to €1,775, while the employee tax credit and the earned income tax credit will both increase by the same amount.

It is estimated that the changes will save single people around €800 a year and couples €1,600.

The second USC band is set to be increased from €20,687 to €22,920 due to the increase in the Minimum Wage. The increase in the Minimum Wage to €11.30 from 1st January 2023 has already been announced.

Another change that had already been noted is the increase in the annual limit on tax free vouchers that employers can give their staff, which is rising from €500 to €1,000. In addition, two vouchers can be given under the exemption in this tax year if an Employer wishes to do so.

State Pensions and Social Welfare Rates

Pensioners will receive a double payment of the €253 per week state pension twice. The first of these will be paid shortly after the Budget and then again in December.

Pensioners in receipt of the Living Alone allowance will receive a separate €200 payment while those claiming the Fuel Allowance are in line for a once-off €400 lump sum on top of their usual rate. The Fuel Allowance scheme is also being extended for an estimated 80,000 people who would have not previously qualified.

There is a €12-per-week increase in all social welfare rates in the new year, along with a special once-off €500 payment for carers and people with disabilities this year.

Business Energy Support Scheme (BESS)

It was announced that €1.4bn is being allocated to the new Business Energy Support Scheme (BESS). Under the scheme, small to medium businesses will be able to avail of grants of 40% of the increases in energy bills covered, up to €10,000 per month per premises, to help with their energy costs.

Cost of Living Supports

A number of one-off measures were announced to help people manage the continuing increased cost of living including additional electricity credits. All households will receive electricity credits of €600 that will be taken off bills in three instalments of €200 over the coming months. The first payment will be before Christmas.

Parents will see a double payment of the monthly Child Benefit which will be worth €840 to a family with three children. This will be paid on 1st November 2022.

There will also be two double payments of welfare rates between now and the end of the year.

VAT for Hospitality Sector

Minister Donohoe confirmed that a special VAT rate for hospitality of 9 per cent will expire at the end of February 2023.


If you need any additional further support or advice, please contact one of our expert-led team at:
Dublin Office: (01) 561 3594 | Cork Office: (021) 486 1420 | Shannon Office: (061) 363 805 |

Please note that this content is provided for information purposes only and does not constitute legal or other advice.