How will the Budget 2024 affect your income?

A look at how the Budget 2024 measures affect the income of 8 different types of households. The impact ranges between €1,862 for a two-person household to €3,132 for a four-person household.

The impact of Budget 2024 on people’s income can be summarised in three key points:

The first is a rise in wages, either through the cost-of-living-adjustment (COLA) or the minimum wage, and in a main income benefit, such as a pension or carer’s allowance.

The second is the additional COLA benefit.

The third is the increase in the household’s secondary social benefits, such as children’s allowance, in-work benefit, or other relatively small social benefits, such as the Senior Citizens Grant.

The table below shows how these change for 8 different types of households. The impact ranges between €1,862 for a two-person household to €3,132 for a four-person household. In all cases, no consideration is given to the fact that these households are benefitting from the Government support on energy and fuel, which contributes to a saving of about €800 for every adult.

The exercise also discounts the impact of the tax refunds, as these were paid last year too, together with savings from the fact that tax thresholds get changed for pensioners and those on the minimum wage. If one had to include all these impacts, the total change in income would be at least €1,000 higher for each working adult in the household.

Example 1

If one looks at a household with two persons, one of which is a carer and the other is an elderly person. Here there will be a rise of €1,532 in the carers allowance and the pension, the additional COLA would be €280, while the Senior Citizens Grant would rise by €50 – altogether an improvement of €1,862.

Example 2

Going to a slightly larger household composed of a single person on social assistance with two young children. Here, the total impact goes to €2,066, but the main source is the additional COLA, which would amount to some €900 for this household. Another strong improvement would come from the children’s allowance which would nearly equal the COLA wage increase.

Example 3

If, instead one looks at a five-person household, where there is one earner for the three young children, the bulk of the improvement in income comes from the children’s allowance and the in-work benefit. These would boost income by €900. The additional COLA would nearly equal the standard wage COLA. Altogether the three elements will boost income by €2,216.

Example 4

In the case of a four-person household where both parents work, the main rise in income comes from the standard COLA increase. However, these would be supplemented with the increase in the children’s allowance and in-work benefit, and the additional COLA. Even though there are two earners in this household, the additional COLA is still quite strong, reflecting the fact that its generosity is also based on how many persons there are in a household. The combined improvement in income in this case goes up to €2,467.

Example 5

Turning to a working single parent on the minimum wage with two children, the bulk of the increase comes from the rise in the minimum wage, which boosts income by €1,082. However there is another big positive impact thanks to the additional COLA, which will increase this single parent’s income by €800. This is then supplemented with the increase of the children’s allowance and inwork benefit. This single parent will get a significant income boost of €2,482.

Example 6

For a working couple with two children, one of whom is in post-secondary education, on the one hand they will be getting the standard COLA increases that total €1,332 between them, and on the other their benefits will go up by €850. On top of that they will get an additional COLA payment of €535. Altogether the income of this family will be improving by €2,717.

Example 7

Budget 2024 also gives special boosts to those families with special circumstances, for example a couple which has just had a baby and a parent stops for a while to take care of the newborn. Here the standard COLA increase is of just €666. They will get an additional COLA of €650, but more importantly an increase in benefits of €1,600. The bulk of the latter is the award of a much enhanced child birth bonus. This family, as a result, will benefit from an improvement of €2,916.  

Example 8

The final example for this exercise is a couple with two children, one of whom requires constant care as she is disabled. In this case, besides the increase in the wage of the main earner, there is a strong rise in the carer’s allowance of the caregiver. Taken together these two measures raise income by €1,570. The additional COLA award is also quite strong, at €725, while other benefits, such children’s allowance and the inwork benefit, will rise by €837. As a result, this family with its very special needs will see an overall improvement of €3,132 as a result of the Budget 2024.

 COLA / minimum
wage /
carers allowance /
pension
Additional COLAChildren’s allowance /
in-work
benefit /
other
Total
Carer and elderly person living at home€1,532€280€50€1,862
Single parent on social assistance with two children€666€900€500€2,066
One earner couple with three young children€666€650€900€2,216
Couple both working with two children€1,332€535€600€2,467
Single parent on minimum wage with two children€1,082€800€600€2,482
Couple with two children, one of whom  in further education€1,332€535€850€2,717
One earner couple with one child and a newborn€666€650€1,600€2,916
Couple with two children, one of whom requires care€1,570€725€837€3,132

Photo credit: Andrea Piacquadio

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