Budget 2024: Childcare fees to be cut by 25pc, Mortgage relief for ...

The cut will be seen as a win for the Green Party as Children's Minister Roderic O'Gorman will have met his promise to cut fees in half over two Budgets, after last year’s cut of 25pc.

However, discussion on final details are still ongoing.

Separately, around 160,000 homeowners will benefit from a temporary mortgage interest tax relief worth up to €1,250.

Finance Minister Michael McGrath will announce the cost-of-living measure in tomorrow’s Budget as the Government sets out a range of economic policies aimed at tackling the record levels of inflation over the last year.

The relief will be available to homeowners whose principle private residence has an outstanding mortgage of between €80,000 and €500,000 as of December 31, 2022.

Those eligible for the tax break will be able to avail of 20pc relief on the increased amount of interest paid on their mortgage between 2022 and 2023.

The scheme will be capped at €1,250 per home and the Department of Finance estimates the average payment will be around €700.

Homeowners will be able to apply for the tax relief through the Revenue Online System and will be required to upload mortgage statements for the last two years.

The relief is not available to commercial properties and mortgage holders who took out further debt over the last two years will not be eligible for the scheme.

Meanwhile, around 770,000 children will benefit from the free school book scheme and free calculators and copybooks as part of a €55m package by Education Minister Norma Foley.

Schoolbooks are already free for primary schools. This will now be extended to the first three years of secondary school.

First, second and third year students in secondary school will receive free school books from next September.

Free copybooks, calculators, dictionaries and other classroom resources will be included as part of the package.

Schools will receive funding to go out and purchase resources and provide them to pupils.

School books will be owned by schools and will have to be returned at the end of the school year.

It comes as the Government is set to unveil a cost-of-living package of one-off measures costing more than €2.3bn alongside tomorrow’s Budget.

The cost-of-living package will include electricity credits worth at least €400 and a double welfare payment in January.

There will also be a series of one-off payments for carers, people with disabilities and fuel allowance benefits for older people and those on lower incomes.

The payment will be in addition to the Christmas bonus, which is expected to be paid in December.

Meanwhile, the Government has settled on increasing all weekly welfare rate payments by €12 from January rather than a bigger hike later in the year.

Public transport cuts of 20pc are expected, as well as the young adult Leap card, which gives 18- 24 year olds half price public transport, are both set to be extended.

Further public transport reductions are not expected.

A double Child Benefit payment will be paid to all parents before Christmas.

Families could also benefit from the expansion of the hot school meals scheme to every primary school in the country.

Every household in the country will also benefit from a discount of between €300 and €400 on their electricity bills between now and next spring under proposals being finalised.

The renter’s credit, now €500, is due to reach a new level of €750 or €800, sources say.

Meanwhile landlords will received tax relief at the 20pc standard rate on a proportion of their rental income – once they agree to keep their properties on the market.

It could see the first €3,000 of €10,000 income become sheltered under 20pc relief - meaning an extra €600 income for landlords. The relief is likely to be spread over three or four years in return for landlords maintaining properties as available to rent in that period, or with sitting tenants.

Homeowners will also be able to claim 20pc tax relief on mortgage increases between this year and last year, capped at around €1,250 under a new scheme to be announced by Finance Minister Michael McGrath.

Budget 2024: How new measures will benefit you

In good news for taxpayers, the entry point for the top rate of 40pc tax is to increase by €2,000 to €42,000 in the Budget.

The USC of 4.5pc rate will drop to 4pc saving the average worker €235 a year, but there will be more.

That’s because the ceiling for the 2pc rate is to go up by €2,800 – saving those workers an additional €56 a year.

The ceiling, before the rate changes to the new (and reduced) level of 4pc, will increase from €22,900 to €25,700.

The combined USC changes therefore benefit workers by nearly €300 a year, separate from income tax changes.

Here the standard PAYE credit (and other related credits) will increase by €100.

Meanwhile the 20pc standard rate band will widen further, and by €2,000. The saving here will be €400, money sheltered from the 40pc higher rate otherwise being applied.

Smokers are set to be hit with at least a 50c increase in the price of cigarettes. The Government is also expected to announce its commitment to taxing e-cigarettes and vapes but this will need legislation which will be enacted at a later date.

Meanwhile, a large package of tax cuts and once off measures for businesses hit by hikes in energy costs, the minimum wage and improved working conditions will be a part of tomorrow’s Budget announcement.

The package from Enterprise Minister Simon Coveney will seek to relieve businesses put under pressure as a result of Government imposed costs in recent months.

Minister Coveney as well as Taoiseach Leo Varadkar were seeking to provide relief to businesses from these costs in Budgetary negotiations.

Most of the final decisions are to be signed off on this afternoon by the three Government leaders and money ministers Paschal Donohoe and Michael McGrath.

There were also high-level talks about introducing pay-related benefits for people who lose their jobs which could see them paid 60pc of their weekly salary or up to €450 a week for six months after they become unemployed.

Social Protection Minister Heather Humphreys has championed the scheme which would see graduated payments paid to the unemployed, so their income does not drop off a cliff edge once they lose their job.

The plight of the 650 Tara Mines workers who suddenly lost their jobs earlier this year has given Ms Humphreys the impetus to introduce the scheme.

The new scheme will be paid for by a 0.1pc increase in PRSI paid by workers which will equate to around 90c extra a week.

Meanwhile, around 50,000 students are set for a significant Budget boost with college grants in line to increase by more than €300 next year.

Higher Education Minister Simon Harris is still in talks aimed at reducing college fees but has secured an increase in state-funded grants from January.

Some students will be able to apply for Student Universal Support Ireland (SUSI) grants of almost €4,000-a-year while students from low-income families will be able to apply for grants of more than €7,000. Post-graduate students will be eligible for grants of up to €2,300.

The move follows the securing of funding to increase grants and reduce college fees in last year’s Budget negotiations.

And there will be a major hike in the allowance paid to trainee gardaí in a bid to boost recruitment to the force, with the weekly allowance of €184 being increased to €305 from tomorrow onwards.