Budget 2024 Retirement

Every budget means something for your retirement and, of course, that much-valued pension you worked so hard to earn during your working life. The Minister for Finance delivered the 2024 Budget to the Dail in October 2023 with a few changes to pensions and retirement in there as well.

What does Budget 2024 hold for those enjoying their retirement? What if you’re thinking of retiring soon? Can you afford to retire on your current pension plan? Are there any changes in the new Budget that will affect spending or that can reduce your costs in the coming year?

The main interests in Budget 2024 for those on a pension are, as always:

  • The one-off cost of living supports
  • Changes in tax measures
  • Payment increases

We had a detailed look at the minister’s Budget 2024 to see how it works for those in retirement or planning to retire soon. 

The cost of living, paying those monthly bills, and even filling up the car at the pumps are all concerns when you are on a pension, especially when the state pension is your only income.

By looking at the big questions and those little ones that could have a bigger-than-expected effect on you and your pension, we put together a potted guide to Budget 2024.

The one-off cost of living supports

The one-off cost of living supports are the headline grabbers of every budget. In Budget 2024, the minister announced a number of supports aimed at helping low-earners and those most affected by the current high prices.

The one-off cost of living supports that can help those on a pension:

  • One-off electricity payments
  • Fuel allowance bonus
  • Living alone allowance bonus

The one-off electricity payments

The one-off electricity payments are back in Budget 2024. By giving each household a one-off payment of €600, spread out over three bill cycles as €200 credits, the government hopes to lessen the pain of the current high cost of energy on homes.

Fuel allowance bonus

A fuel allowance bonus payment of €300 is paid to those who already qualify for a fuel allowance payment. 

The weekly fuel allowance is a means-tested payment that many people already on a pension may qualify for to help keep the house warm.

Living alone allowance bonus

The living alone allowance bonus is an extra payment made to those who already get the social welfare additional payment for living alone. The living allowance bonus is €200 and is paid automatically to those with a qualifying payment.

Tax changes in Budget 2024

Tax changes in Budget 2024 saw nothing unusual for those on a pension or those who have taken early retirement but are still working part-time. 

Any changes in tax can affect you when on a pension, and it is always worth looking at the measures when balancing your income against outgoings.

The headline tax credits changes in Budget 2024 for those on a pension but working:

  • €2000 increase in the standard rate income tax cut-off point
  • €100 increase in your personal tax credit
  • €100 increase in the earned income credit
  • €100 increase in the home carer tax credit

All of these tax credit changes could make a big difference to the income of your home each week or month. The €2000 increase in the standard rate cut off for tax and the €100 personal tax credit could make working affordable after taking early retirement. 

If you are caring for someone in the home, which many people on a pension are doing, you may benefit from the €100 increase in the home carer tax credit.

Other tax benefits seen by those on a pension in Budget 2024 are:

  • The Rent Tax Credit increases from €500 to €750
  • The VRT relief on battery electric vehicles is extended to the end of 2025
  • Excise duty and VAT on cigarettes increases to 75c for a pack of 20

Having an increase in the Rent Tax Credit will help those in rented accommodation get something back for the money they pay out each year to the landlord. 

Drivers of electric cars will enjoy the VRT relief for another year which will be a help with annual outgoings. 

The increase in the price of the pack of 20 cigarettes might encourage more people to give them up, which is a benefit to the pocket and to your health.

tax changes

Payment Increases in Budget 2024

Any payment increases are welcome in the budget and are probably the first items people look for on budget day. It is not any different when on a pension, as those payment increases can go a long way.

When you are retired and still working or maybe in part-time education, there can be a few pleasant surprises with the increase in budget payments.

Headline payment increases in Budget 2024 are:

  • People on the state pension will see a €12 per week increase in payments
  • Social Welfare payments go up by €12 per week for those still working
  • The Working Family Payment threshold goes up by €54 per week
  • 20% fare reduction on public transport extended for another year
  • Investment of €1 million per day in walking and cycling infrastructure

The increase of €12 per week, while welcome, still keeps the state pension way below where it should be for those who rely on it solely for their income. 

Increases in other Social Welfare payments of €12 will help those who qualify along with the announced tax measures.

A reduction in the public transport fares can be a saving when the local bus, train or Luas is your only way of getting around.

The €1 million per day investment in walking and cycling infrastructure is great news for those retirees who love to get out and about for exercise and fun.

Your pension

Your pension may well be your only income into the house. Every budget can affect your pension and how far it goes each week or month.

If you are planning a pension or thinking about planning a pension, you need all the best advice to get you on the right path. You do not want to find out too late that your pension plan isn’t what it should be, so plan your pension well.

Contact National Pension Helpline today for all your pension needs.

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