Changes to the minimum wage, universal social charge and educational spending were among some of the major announcements, with the absence of AI and digitalisation mentions concerning some.
Budget 2025 is here (1 October), with Minister for Finance Jack Chambers, TD, and Minister for Public Expenditure, National Development Plan Delivery and Reform Paschal Donohoe, TD, delivering their speeches regarding the next year of Ireland’s economic plans and strategies.
Chambers opened the session noting there are “real vulnerabilities in Ireland’s public finances and these must be kept in mind when constructing a budgetary package”. Underlined in the budget were various measures set to impact current employees, jobseekers and people in post-secondary education.
The level of employment is predicted to grow by nearly 110,000 people in the two-year period until the end of 2025, with a relatively low projected unemployment rate of roughly 4.5pc. From 1 January 2025, the national minimum wage is set to increase to €13.50 per hour and employees can also expect an increase in main tax credits, personal, employee and earned income credits by €125.
To account for the change in the national minimum wage, the entry threshold to the 3pc universal social charge (USC), which has been lowered from 4pc, is being increased by €1,622 to €27,382. Therefore, full-time employees on the minimum wage can expect a €1,424 increase in their annual net take home pay.
The standard rate cut-off point has increased by €2,000 to €44,000, with proportionate increases for married people and those in civil partnerships. Additionally, single people earning less than €20,000 annually in 2025 will now be outside of the income tax net.
Donohoe announced a social protection package valued at almost €2bn, which includes a €12 increase in weekly social protection payments and an increase in maternity, paternity, adoptive and parents’ payments, of €15. Families who qualify for the working family payment will also receive a €400 lump sum.
Higher education
In addition to announcements related to employment, the budget also unveiled several changes targeting people in higher education. The national training fund was described as being “in surplus” and there is a €1.5bn package to be made available until 2030.
The package will include an annual €150m increase in the core funding of higher education, an increase in some PhD stipends and additional support for veterinary and healthcare places, in line with the expressions of interest expansion programme.
This includes funding to the tune of €78m in support of growing craft-based apprenticeships and the upskilling of SMEs alongside the community, voluntary and social enterprise sectors.
With many young people commuting to their place of education, to alleviate the pressures of transport costs, people between the ages of 19 and 25 can avail of the young adult card, which is part of the continued fare initiatives.
Too much focus elsewhere?
Members of the National Women’s Council (NWC) welcomed the budget and the commitment to improving family leave supports through maternity, paternity, adoptive and parental benefits. However, NWC women’s economic equality coordinator Donal Swan raised concerns that the focus on income tax cuts has the potential to disproportionately affect women.
“Weakening our tax base through permanent income tax cuts in Budget 2025 is very costly and is more likely to negatively impact women through under-investment in public services. As women are more likely to be in low-pay and part-time jobs, they benefit less from income and wealth tax cuts and are more likely to be reliant on public services,” said Swan.
Additionally, director of HR professionals body CIPD, Mary Connaughton, applauded improvements to the minimum wage and family leave benefits, however, she queried the lack of attention given to the need for significant training to upskill the workforce amid mass technical innovation.
“The changing workplace means upskilling is an urgent requirement for many, while the growing popularity of apprenticeships must be adequately resourced. However, while Minister for Public Expenditure Paschal Donohoe, TD, pledged a six-year package worth €1.5bn to fund research, further and higher education and skills development, it is concerning that there was no direct reference to the urgent need to provide training to cope with the growth of digitalisation and AI in the workplace.
“We look forward to seeing the details of this package and hope the skills gap is addressed.”
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