Ireland’s Budget 2027 was unveiled in the Dáil on Tuesday by Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers, delivering a mix of income tax cuts, welfare increases and cost-of-living measures. Here is a full breakdown of what was announced.
Income Tax and USC: Income tax rates will remain unchanged at 20% and 40%, but tax credits will rise and income tax bands will shift, meaning workers keep more of their earnings before hitting the higher rate. The ceiling for the 2% Universal Social Charge (USC) band will increase by €1,600, to €30,300, a change specifically aimed at ensuring lower-paid workers also benefit from the package, and at ensuring the minimum wage increase doesn’t push full-time workers into the higher 3% USC band. Mr Harris said the combined changes mean a worker earning €50,000 a year will pay more than €700 less in income tax and USC. Separately, the Home Carer Tax Credit will rise by €100.
Minimum Wage: The national minimum wage will rise by 79 cent, from €14.15 to €14.94 per hour, from January 1, 2027, following a recommendation from the Low Pay Commission. To avoid discouraging employers from keeping staff on full hours at the new rate, the weekly income threshold for the higher rate of Employer’s PRSI will also rise, from €552 to €600 a week.
Fuel and Energy: The planned restoration of excise duty on petrol and diesel, due to begin on November 1, has been postponed to February 28, 2027. After that, excise will be restored “gradually and responsibly” in four phases, with full restoration not completed until June 30, 2027. Carbon tax on kerosene and natural gas has been reduced to €48.50 per tonne, with Mr Harris confirming this rate will remain fixed for the lifetime of the current Government. The Fuel Allowance will rise by €5 a week, to €43, with a higher income threshold of €641 for single people over 66.
Capital Gains Tax: The rate of Capital Gains Tax will fall by two percentage points, from 33%.
Social Welfare: Core weekly social welfare and pension payments will rise by €10. The Child Support Payment will increase by €6, and the Living Alone Allowance by €3 a week. The income disregard for Carer’s Allowance rises by €150 for a single person and €300 for a couple. A new annual cost-of-disability payment of €500 was also confirmed.
Housing: The Help to Buy scheme for first-time buyers increases by €5,000, to €35,000. The Rent Tax Credit rises to €1,150 for an individual and €2,300 for a couple.
Health: Mental health funding will rise by €108 million, funding six additional services. The age limit for free contraception has been increased.
Childcare and Education: A new monthly childcare fee cap of €550 has been introduced, with higher subsidies for children under seven from next September. General college fees will fall by €150 a year, with expanded grant access for families with more than one child in third-level education.
Cigarettes, Vapes and Other Measures: The price of a packet of 20 cigarettes will rise by €1, including VAT, with a pro-rata increase on other tobacco products. The vape tax rate will rise from 50 cent to 70 cent per ml of e-liquid, excluding VAT, from January 1, 2027. VAT on respiratory vaccines for livestock will fall from 23% to 9%. Farmers will see a full top-up to the fertiliser support scheme, an extended agricultural fuel rebate scheme, and a rise in the Farmer’s Flat Rate Scheme addition, from 4.5% to 4.8%.
Watchdog Warning: The Irish Fiscal Advisory Council (IFAC), the State’s independent budget watchdog, warned that the measures put the public finances on a “worse trajectory.” Opposition parties were also critical: Sinn Féin’s Pearse Doherty repeated his party’s call to abolish USC entirely on the first €40,000 of income, while Social Democrats leader Holly Cairns branded it a “Budget for Scrooges.”
