9th October. Budget Summary Financial Broker Use Only. Introduction. Key Points for the Life & Pensions Industry

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1 Budget Summary th October Introduction Minister for Finance, Paschal Donohoe T.D. today delivered his second Budget speech, in which he stated that we must continue to maintain a broad and stable tax base, ensure our spending is efficient and sustainable and that our economy is as resilient in bad times as it is dynamic in good times. Key Points for the Life & Pensions Industry The increase to the State Pension (Contributory) of 5 per week and the restoration of the 100 per cent Christmas bonus payment to all social welfare recipients this year could remove the need for many people having to set up an Approved Minimum Retirement Fund (AMRF) as they will now meet the specified income test of 12,700 a year. Further details of how these changes will impact upon the requirement to set up an AMRF may be contained in the Finance Bill. Aviva will be writing to existing AMRF customers to inform them of these changes. The current Group A tax free threshold which applies primarily to gifts and inheritances from parents to their children is being increased from 310,000 to 320,000. This increase applies in respect of gifts or inheritances received on or after the 10 October Other Key Measures Announced in Budget 2019 Two changes to the Universal Social Charge (USC) were announced which will apply from 1 January 2019: 502 increase to 19,372 band ceiling 4.75% rate reduced to 4.50% Incomes of 13,000 or less are exempt. Otherwise: 0 to 0.50% 12,012 to 2.00% 19,874 to 4.50% 70,044 and 8% Self-employed income in excess of 11%. An increase of 750 in the income tax standard rate band for all earners, from 34,550 to 35,300 for single individuals and from 43,550 to 44,300 for married one earner couples which will apply from 1 January An increase in the Home Carer Tax Credit from 1,200 to 1,500 which will apply from 1 January From 1 January 2019 the weekly income threshold for the higher rate of employer s PRSI will increase from 376 to 386. The Earned Income Credit of 1,150 is being increased to 1,350 with effect from 1 January This is available to taxpayers earning self-employed trading or professional income under Cases I, II and III of Schedule D and to business owner/ managers who are ineligible for a PAYE credit on their salary income. The excise duty on a packet of 20 cigarettes is being increased by 50 cents (including VAT) with a pro-rata increase on other tobacco products; and there will be an additional 25 cents on roll your own tobacco. Both measures will take effect from midnight on 9 October The increase in the amount of interest paid in respect of loans used to purchase, improve or repair a residential property that may be deducted by landlords will be accelerated to 100% from 1 January A 5 per week increase in all weekly social welfare payments, including disability allowance, carer s allowance and both Jobseekers Allowance and benefit, as well as a further 5 increase in the State Pension. These measures will take effect in the last week of March 2019.

2 Details of Tax Credits, Standard Rate Tax Bands, Exemption Limits, Other Credits, Universal Social Charge & PRSI rates for 2019 Tax Credits Present Rate (%) New Rate (%) Personal Credit Single Persons 1,650 1,650 Personal Credit Married Persons 3,300 3,300 Employee Credit 1,650 1,650 Additional One- Parent Family Credit 1,650 1,650 Home Carer credit 1,200 1,500 Widowed person bereaved in year of assessment 3,300 3,300 Earned Income 1,150 1,350 Fishers Tax Credit 1,270 1,270 Standard Rate Tax Bands * Present Rate (%) New Rate (%) Single/Widowed Persons 34,550 35,300 Married Couples One Income 43,550 44,300 Married Couples Two Income 69,100 70,600 One Parent/Widowed Parent 38,550 39,300 * The tax band of e70,600 available to married couples with two incomes in 2019 is transferable between spouses up to a maximum of e44,300. Exemption Limits 65 years and over Present Rate (%) New Rate (%) Single 18,000 18,000 Married 36,000 36,000 Other credits Present Rate (%) New Rate (%) Incapacitated child tax credit 3,300 3,300 Dependent relative tax credit Blind person tax credit - single 1,650 1,650 - married (both blind) 3,300 3,300 Additional credit for certain widowed persons Widowed parent tax credit - year 1 3,600 3,600 - year 2 3,150 3,150 - year 3 2,700 2,700 - year 4 2,250 2,250 - year 5 1,800 1,800 Age credit - single married Universal Social Charge (USC)* Present Rate (%) New Rate (%) Total income below 13,000pa 0% 0% If total income exceeds 13,000pa, the following applies: Income up to 12,012pa 0.5% 0.5% Income between 12,012pa and 19,874pa ( 19,372 p.a. applies to end of 2018) 2.0% 2% Income between 19,874pa and 70,044pa ( 19,372 p.a. applies to end of 2018) 4.75% 4.5% Income of 70,044pa + 8% 8% Over e100,000 (self-employed income only) 11% 11% * Individuals aged 70 years or over whose aggregate income for the year is 60,000 or less, & individuals (aged under 70) who hold a full medical card whose aggregate income for the year is 60,000 or less, will pay a maximum rate of 2% USC. Source: Department of Finance website 9 October 2018.

3 Social Protection Rates of Payment 2019 Maximum Weekly Rates of Social Insurance from March 2019 State Pension (Contributory) Present Rate (%) New Rate (%) (i) Under 80 Personal Rate Person with qualified adult under Person with qualified adult 66 or over (ii) 80 or over Personal Rate Person with qualified adult under Person with qualified adult 66 or over Widow s /Widower s Contributory Pension Present Rate (%) New Rate (%) Under and under or over Invalidity Pension Present Rate (%) New Rate (%) Personal Rate Person with qualified adult Carers Benefit Present Rate (%) New Rate (%) Personal Rate Maternitiy Benefit Present Rate (%) New Rate (%) Personal Rate Occupational Injuries Benefit Death Benefit pension Present Rate (%) New Rate (%) (i) Personal rate under (ii) Personal rate 66 and under (iii) Personal rate 80 and over Occupational Injuries Benefit Disablement Pension Present Rate (%) New Rate (%) Personal Rate Illness /Jobseeker s Benefit Present Rate (%) New Rate (%) Injury Benefit/Health and Safety Benefit Present Rate (%) New Rate (%) Guardian s payment (contributory) Present Rate (%) New Rate (%) Personal Rate Increases for a qualified child Present Rate (%) New Rate (%) All schemes in respect of all children Living Alone Allowance Present Rate (%) New Rate (%) All relevant schemes

4 Maximum Weekly Rates of Social Assistance from March 2019 State Pension (Non Contributory) Present Rate (%) New Rate (%) (i) Under 80 Personal Rate Person with qualified adult under (ii) 80 or over Personal Rate Person with qualified adult under Widow s /Widower s Non Contributory Pension Present Rate (%) New Rate (%) One Parent Family Payment Present Rate (%) New Rate (%) Personal Rate with one qualified child (child not aged 18) Carer s Allowance Present Rate (%) New Rate (%) (i) Under (ii) 66 or over Disability Allowance Present Rate (%) New Rate (%) Pre-Retirement Allowance /Farm Assist Present Rate (%) New Rate (%) Guardian s Payment (Non Contributory) Present Rate (%) New Rate (%) Personal Rate Increases for a qualified child Present Rate (%) New Rate (%) All schemes in respect of all children Living Alone Allowance Present Rate (%) New Rate (%) All relevant schemes

5 Changes in Maximum Weekly Rates of Jobseeker s Allowance from March to 21 years of age Present Rate (%) New Rate (%) Person with qualified adult under to 24 years of age Present Rate (%) New Rate (%) Person with qualified adult under years of age Present Rate (%) New Rate (%) Basic Personal Rate Person with qualified adult years of age and over Present Rate (%) New Rate (%) Changes in Maximum Weekly Rates of Supplementary Welfare Allowance from March to 21 years of age Present Rate (%) New Rate (%) Person with qualified adult to 24 years of age Present Rate (%) New Rate (%) Person with qualified adult years of age Present Rate (%) New Rate (%) Basic Personal Rate Person with qualified adult years of age and over Present Rate (%) New Rate (%) Basic Personal Rate Person with qualified adult Changes in Monthly Rates of Child Benefit from March 2019 Child Benefit Present Rate (%) New Rate (%) Rates per child Retirement Investments Insurance This summary has been produced by Aviva Life and Pensions Ireland based on its understanding of the laws and practice current in October While great care has been taken to ensure the accuracy of the information it contains, the company cannot accept responsibility for its interpretation, nor does it provide legal or tax advice. Aviva Life & Pensions UK Limited, trading as Aviva Life & Pensions Ireland, is authorised by the Prudential Regulation Authority in the UK and is regulated by the Central Bank of Ireland for conduct of business rules. Aviva Life & Pensions UK Limited, trading as Aviva Life & Pensions Ireland, is also regulated in the UK: by the Prudential Regulation Authority for prudential rules and, to a limited extent, by the Financial Conduct Authority for applicable UK conduct rules. Registered Branch Office in Ireland (No ) at One Park Place, Hatch Street, Dublin 2. Tel (01) Web Registered in England ( ) at Wellington Row, York, YO90 1WR