Budget 2022 measures compensate most households for rising prices - ESRI post-Budget briefing

Budget 2022 measures compensate most households for rising prices - ESRI post-Budget briefing

On Friday, 15th October 2021, ESRI researchers, Barra Roantree (Research Officer), Karina Doorley (Senior Research Officer) and Kieran McQuinn (Research Professor) presented the annual post-Budget briefing.

00:00:00 Alan Barrett, introduction
00:02:18 Kieran McQuinn, Budget 2022: A Macroeconomic Perspective

Increases to welfare payments and tax bands announced in Budget 2022 will on average compensate households for forecast price growth, according to new research presented today at the Economic and Social Research Institute’s post-budget briefing. However, below inflation increases to the Working Families Payment and State Pension mean that some low-income working parents and retired couples who do not receive the Fuel Allowance will see their disposable incomes eroded by rising prices.

The research also finds that although increases to the carbon tax and tobacco duty disproportionately affect lower income households, these also gain from above inflation increases to core social welfare payments and supplements for those living alone or with dependents. These increases are sufficiently large to offset the impact of increases to indirect taxes for the lowest-income fifth of households and will leave poverty slightly lower than had all welfare payments and tax bands kept pace with inflation.

While the above inflation ‘indexation’ of income tax bands and credits will also compensate higher income households for the increases in indirect taxation, most Universal Social Charge and PRSI bands were not changed. The effect of this is to reduce the after-tax purchasing power of lower earners who do not earn enough to pay income tax, though some of these will gain from an increase to the minimum wage.

Presentation slides from the event are available on the ESRI website: https://www.esri.ie/events/post-budget-briefing

On Friday, 16 October 2020, ESRI researchers, Barra Roantree (Research Officer), Karina Doorley (Senior Research Officer) and Claire Keane (Senior Research Officer) presented the annual post-Budget briefing.

The presentation included an assessment of the likely economic effects and impact on households of the tax and welfare measures announced in Budget 2021.

They will also examined the impact that COVID-19 has had on incomes in Ireland and the role the tax-benefit system has played in cushioning income losses relating to the pandemic to date.

To view the presentation slides from the event, click here: https://www.esri.ie/events/esri-post-budget-briefing

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