Impact of Tax & Benefit Changes, 2020-2022
Budget 2022 marks the second Budget of the current Government. On this page we track the cumulative impact of changes to income taxation and welfare over the Government’s two Budgets.
At the outset it is important to stress that our analysis does not take account of other budgetary changes, most particularly to indirect taxes (VAT and excise), other charges (such as prescription charges) and property taxes. Similarly, it does not capture the impact of changes to the provision of public services. As the impact of these measures differs between households it is impossible to quantify precise household impacts and include them here. However these changes impact hardest on households with the lowest incomes.
Chart 1 Overall Impact 2020-2022 on Welfare Dependent Households
The households we examine are spread across all areas of society and capture those with a job, families with children, those unemployed and pensioner households. Within those households that have income from a job, we include workers on the minimum wage, on the living wage, workers on average earnings and earners with incomes ranging from €30,000 to €200,000. In the case of working households, the analysis is focused on PAYE earners only and therefore does not capture the Budget 2021 measures targeted at the self-employed.
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Chart 2 Overall Impact 2020-2022 on Households with Jobs
As there were limited changes in income after Budget 2021, most changes reflect measures from this year’s Budget. Among households with jobs (see chart 2), the gains experienced range from a mere 39 cent per week (for low income couples on €30,000) to €16.11 per week for couples with incomes over €80,000. Earners on the living wage gain more on account of the increase in the level of that payment. The analysis highlights how low income families, those with incomes below the standard rate income tax threshold gain least from the budget measures over the past two years.
Among households dependent on welfare, the gains have ranged from €5 per week for single unemployed individuals to €24.65 per week for unemployed couples with 2 children over 12 years of age.