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An overview of the Irish Government's State Budget Announcement 2023

September 28, 2022

Here are the key points from Irish Government's State Budget Announcement 2023 announced by Minister for Finance Paschal Donohoe and Minister for Public Expenditure Michael McGrath.

Budget 2023 Overview

The State Budget for 2023 was announced yesterday afternoon by Minister for Finance Paschal Donohoe and Minister for Public Expenditure Michael McGrath.

In his speech to the Dáil, Minister Donohoe said that this was a ‘cost of living’ budget aimed at supporting households, families and businesses to manage increasing day-to-day costs. According to Donohoe, Ireland’s economic position means the country benefits when things are going well internationally, while the reverse applies when things are not going well.

“In drafting Budget 2023 Government has a responsibility to strike a delicate balance between helping with the cost of living pressures but, on the other hand, not making them worse by adding fuel to the inflationary fire.”

Economic Forecast

In terms of an economic forecast for the year ahead, Minister Donohoe said that inflation will average 8.5% in 2022 and 7% in 2023. Unemployment is expected to remain at the current low level, while an exchequer surplus of €1bn is expected this year and a surplus of €6.2bn expected next year.

Budget 2023

The following measures have been introduced in today’s budget:


  • Standard rate cut-off point for income tax increased to €40,000
  • Main tax credits increased by €75
  • The second USC band has increased by 2% to €22,920 in line with recent minimum wage increase
  • Analysis of the introduction of a third rate of income tax to be carried out next year

VAT & Excise

  • Excise reductions on petrol, diesel and marked gas oil extended until the end of February 2023
  • The reduced 9% VAT rate on electricity and gas in place until the end of February 2023

Business Supports

  • Introduction of a Temporary Business Energy Support Scheme to assist businesses with energy costs
    • Administered by Revenue & will operate on a self-assessment basis
    • Businesses will need to register for the scheme
    • Comparing billing periods in 2022 with corresponding period in 2021, if the average unit price has increased by 50%, businesses will be eligible to claim support
    • Support will be calculated on the basis of 40 per cent of the amount of the increase in the bill amount
  • Monthly cap of €10,000 per trade, and overall cap on total amount a business can claim
  • VAT rate for hospitality sector to remain at 9% until 28 February 2023, increasing to previous 13.5% at that point
  • Small benefit exemption limit increased from €500 to €1,000
  • Introduction of a ‘Ukraine Crisis Enterprise Scheme’ worth €200 million for Irish exporters and manufacturers impacted by the war

Business Taxation

  • Commitment for Ireland to be part of EU-wide windfall energy tax programme. If the EU does not reach an agreement, Government will bring forward its own measures
  • Knowledge Development Box for intellectual property development increased for a further four years


  • Help-to-buy scheme extended to 2024
  • Rental tax credit of €500 for 2022 and 2023
  • Vacant Homes Tax
    • Applicable for units occupied for less than 30 days in a twelve month period
    • Exemptions to be outlined to avoid unfair charges
    • Tax charged at three times the rate of the applicable Local Property Tax
  • €1.7bn Department of Housing budget for social homes in 2023
  • €215m for homelessness services


  • €600 energy credit for all households, to be paid in three instalments of €200, one before Christmas and two in the new year
  • Additional €400 for recipients of the Fuel Allowance, paid before Christmas
  • €100m for schools, €60m for non-profit organisations and €100m for health funded bodies to support energy costs

Social Welfare and Social Protection

  • Double week for all recipients of social welfare in October, including pensioners, jobseekers and carers
  • €500 payment to Carers Support Grant recipients in November
  • Double Child Benefit payment in November
  • Extension of 20% reduction on public transport fares until the end of 2023
  • €12 increase in weekly social protection payment
  • Qualifying income for fuel allowance threshold increased from €120 to €200


  • Reduction of up to 25% in the weekly fee for those availing of the National Childcare Scheme


  • Funding of €23.4 billion for the health sector in 2023, a €1.15bn increase in current funding
  • Recruitment of up to 6,000 additional staff
  • Continued reform of health sector based on Sláintecare commitments

Climate Action

• €337 million of funding for grants for energy efficiency
• Introduction of a new low-cost loan scheme for residential retrofitting


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