Dáil Éireann Debate, Thursday - 7 May 2026
254. Deputy Shane Moynihan asked the Tánaiste and Minister for Finance the estimated full-year cost of indexing all personal income tax bands and credits in line with the rate of inflation recorded in the most recent full calendar year; and if he will make a statement on the matter. [33857/26]
View answer255. Deputy Shane Moynihan asked the Tánaiste and Minister for Finance the estimated full-year cost of indexing all personal income tax bands and credits in line with projected inflation for the current year; and if he will make a statement on the matter. [33858/26]
View answer256. Deputy Shane Moynihan asked the Tánaiste and Minister for Finance the estimated cost of increasing the standard rate cut-off point for income tax in line with inflation over the past year; and if he will make a statement on the matter. [33859/26]
View answer257. Deputy Shane Moynihan asked the Tánaiste and Minister for Finance the estimated cost of increasing the standard rate cut-off point to a level that would deliver a net annual gain of at least €520 to a single PAYE worker on average earnings; and if he will make a statement on the matter. [33860/26]
View answer258. Deputy Shane Moynihan asked the Tánaiste and Minister for Finance the estimated full-year cost of a package of measures comprising indexing personal income tax bands and credits in line with inflation; increasing the standard rate cut-off point to deliver a net annual gain of at least €520 to a single PAYE worker on average earnings; and if he will make a statement on the matter. [33861/26]
View answer259. Deputy Shane Moynihan asked the Tánaiste and Minister for Finance the distributional impact, across income deciles, of increasing the standard rate cut-off point to deliver a net annual gain of at least €520; and if he will make a statement on the matter. [33862/26]
View answerI propose to take Question Nos 254,255,256,257,258 and 259 together.
The Deputy may wish to note that a Post-Budget 2026 Ready Reckoner is available on the Revenue Statistics webpage at: www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.
The Ready Reckoner shows a wide range of detailed information, including the estimated cost or yield to the Exchequer of adjusting the standard tax rate bands and tax credits. These figures are based on 2026 estimates from the Revenue tax forecasting model using latest actual data for the year 2023, adjusted as necessary for income, self-employment, and employment trends in the interim.
Using the most recent data available, the recent Annual Progress Report 2026, published last month, the Department of Finance forecast wage growth (wages per head) to increase by 4.3 per cent in 2026.
Based on Revenue’s latest Ready Reckoner (Post Budget 2026), the estimated, current point in time, cost to the Exchequer of indexing the standard rate tax bands and income tax credits in line with wage growth for 2026 are set out in the table below.
|
Indexation of 4.3 per cent |
First Year (€m) |
Full Year (€m) |
|
Standard Rate Income Tax Bands |
440 |
500 |
|
Income Tax Credits |
500 |
560 |
|
Standard Rate Income Tax Bands and Tax Credits |
940 |
1,060 |
I am advised by Revenue that the estimated first and full year cost to the Exchequer in 2026 of the Deputy’s proposal to increase the standard rate cut-off point are €585m and €670m respectively. This is the cost associated with an increase of the standard rate cut-off point from €44,000 to €46,600 for a singly assessed taxpayer without qualifying for the single person child carer credit, and commensurate adjustments made for all other taxpayer categories. As requested by the Deputy, an increase of €2,600 to the standard rate cut-off point would result in an additional €520 per annum per singly assessed taxpayer, for those with sufficient taxable income to fully absorb the increase. These estimated costings refer to all relevant taxpayers, not only PAYE workers.
I am further advised by Revenue that, in terms of a distributional impact across income groups, the table below provides information on the number of gainers broken down by income range. Gainers are defined as taxpayer units who benefit by absorbing the increase, either in part or in full. A taxpayer unit refers to individuals except in the case of couples who are jointly assessed, in which case the couple are counted as one taxpayer unit. It should be noted that the income breakdown relates to gross income rather than taxable income, and includes all taxpayer types, including those who are jointly assessed couples who both have an income source.
|
Range of Gross Income € |
Number of Taxpayer Units Benefitting Either in Part or in Full from the Proposed Increase in the Standard Rate Cut-Off Point |
|
0 - 40,000 |
0 |
|
40,000 - 50,000 |
120,900 |
|
50,000 - 60,000 |
178,800 |
|
60,000 - 70,000 |
137,100 |
|
70,000 - 80,000 |
100,000 |
|
80,000 - 90,000 |
68,700 |
|
90,000 - 100,000 |
54,600 |
|
100,000 + |
396,900 |
|
All |
1,056,900 |
A typical single PAYE worker, depending on reliefs and tax credits, would expect to be charged 40% on taxable income above €44,000, which increases to €48,000 for those qualifying for the Single Person Child Carer Credit. A single individual earning c. €50,000 which, as a specific metric for average earnings was not provided by the Deputy, was taken as an estimate of average earnings for a single PAYE worker, would likely benefit from the full €520 for the tax year.
These cost estimates are for 2026 and are based on Revenue’s micro-simulation tool, Tax Modeller, using actual data for the latest year available, currently 2023, adjusted for income and employment trends in the interim. Income decile analysis is not available in Tax Modeller.
