Social welfare increases and everything else to know about the Budget changes kicking in today

BUDGET 2026 WAS announced on 7 October last year and increased overall government spending by €9.4 billion.

The spending breakdown was €8.1 billion allocated for public spending and €1.3 billion for cuts to taxation. 

The Irish Fiscal Advisory Council criticised the Budget in November and warned that the government is spending “like there is no tomorrow” and cautioned that more should be put away for a rainy day.

While some measures in the last Budget kicked in straight away, such as a carbon tax increase on motorists, other Budget 2026 measures come into effect today and later this year. 

The full changes are available here. 

Here are the main ones to know about that kick in today.

Social welfare and cost-of-living

From today, the maximum rate of most weekly social welfare payments will increase by €10.

There will also be proportional increases for qualified adults and people on reduced rates of payment. The government says that over 1.5 million people will benefit from the weekly increases. 

The Child Support Payment weekly rate will increase by €8, to €58, for children under 12 and by €16, to €78, for children aged 12 and over.

The Domiciliary Care Allowance will also increase by €20, from €360 to €380 per month while the Fuel Allowance will increase by €5 to €38 per week.

Meanwhile, the Working Family Payment will become a qualifying payment for Fuel Allowance in March and this payment will be backdated to January 2026.

Tax and employment

There were no changes to the tax rates and bands or to tax credits in Budget 2026.

But from today, the ceiling for the 2% Universal Social Charge (USC) band will increase by €1,318 to €28,700.

This is being done in line with the national minimum wage also increasing today by 65 cents to €14.15 per hour.

This ensures that full-time employees on the minimum wage will remain outside the higher rates of USC.

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Meanwhile, the lifetime limit on gains eligible for the Capital Gains Tax Revised Entrepreneur Relief has increased from €1 million to €1.5 million, for disposals made from today.

To qualify, you must have owned the business assets for a continuous period of three years, and this three-year period must be in the five years immediately prior to the disposal.

Elsewhere, a new vehicle category for the Benefit-in-Kind scheme takes effect from today.

The new vehicle category has been created for zero-emission cars and Benefit-in-Kind will be calculated at between 6% and 15% of the cars original market value, subject to business mileage.

Education

Students who live more than 30km from their third level institution, and who meet the other criteria for the SUSI maintenance grant, will get an increased grant this month of between €111 and €239 for the current academic year.

This will increase to between €200 and €430 in September for the academic year 2026-2027.

Also from this month, postgraduate students who are eligible for the postgraduate fee contribution grant will get €4,500, up from the previous €4,000.

However, this does not apply to students getting the special rate of grant.

Measures kicking in later

While the rate of carbon tax for petrol and diesel increased overnight when the Budget was announced, increasing from €63.50 to €71 per tonne, this increase will apply to home heating fuels from 1 May.

Meanwhile, in a win for the hospitality business, the VAT rate on food and catering businesses, and hairdressing services, will be reduced to 9% from 13.5% from 1 July.

Also from July, the weekly Carer’s Allowance income disregard will increase to €1,000 for a single person, up from €625, and rise to €2,000 for a couple, from €1,250.

In the same month, the weekly income limit for Carer’s Benefit will increase by €375 to €1,000.

Elsewhere, the base rate of the Wage Subsidy Scheme for people with disabilities will increase by €1.20 to €7.50 in April and a middle rate of €8.50 will also be introduced.

The Wage Subsidy Scheme gives financial support to employers who employ people with disabilities.

Meanwhile, a new Derelict Property Tax will be introduced to replace the existing derelict sites levy paid to local authorities.

The new tax will be at least 7% of the market value of the property and will be collected by Revenue. However, it will not be in place before 2027.

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