Budget 2026 Changes Affecting Cost of Living to Take Effect in January: Complete Guide
As 2026 approaches, significant cost of living adjustments are scheduled to take effect in January. These changes stem from Budget 2026, announced on October 7. Key highlights include increased welfare payments, tax modifications, and other financial support updates.
Key Changes Effective January 1, 2026
- Social Welfare Increases: Most weekly social welfare payments will rise by €10.
- Child Support Payment: Weekly rates will increase to €58 for children under 12 and to €78 for those aged 12 and over.
- Working Family Payment: Income limits will increase by €60 per week, enabling more families to qualify.
- Fuel Allowance: This payment will rise to €38 per week, an increase of €5.
- Domiciliary Care Allowance: Monthly allowances will increase by €20, reaching €380.
- Postgraduate Fee Contribution Grant: Funding for eligible students will increase to €4,500.
- National Minimum Wage: The minimum wage will increase to €14.15 per hour, up by 65 cents.
- Capital Gains Tax Relief: The lifetime limit will rise from €1 million to €1.5 million for disposals made from this date.
Additional Changes Throughout 2026
Some budget provisions will not take effect until later in the year. For example, the VAT rate on food and catering services will drop from 13.5% to 9% in July. Similarly, the weekly income limit for Carer’s Benefit will increase by €375 to €1,000.
Furthermore, many social welfare recipients can look forward to the Christmas bonus, which will be disbursed in the first week of December.
These changes aim to alleviate the financial pressures faced by residents, particularly in an evolving economic landscape.
