€1,200 tax package prepared for average workers in pre-election Budget 2025 bonanza

Child benefit will go up by €10 a month and the state pension will increase by at least €12 a week.

Ahead of the general election, the ­Coalition is going to well and truly open the purse strings.

Finance Minister Michael McGrath has already confirmed there will be a hike in tax credits, an increase in the entry point to the standard rate of income tax and changes to the USC.

The changes from last year’s Budget were worth about €800 to the average worker, but the Budget 2025 bonanza will do the same and another half on top of that.

The first €20,000 a worker earns will be exempt from income tax through tax credit increases.

The point at which someone pays the top rate of tax will go up from €42,000 to somewhere around €44,000. The USC thresholds will be tweaked too.

All told, government sources say the package will be worth about €1,200 for the average middle-income earner.

This is separate from packages for businesses, farmers and families.

Today, a double set of taxes on building a house will be waived for the rest of this year to speed up the construction of housing.

An increase in home-building starts is being attributed to developers taking advantage of the scrapping of development levies and water connection charges.

The Government will decide today to extend the levies waiver and charges rebate, worth about €240m.

Housing Minister Darragh O’Brien will bring the proposal to the first Cabinet sub-committee chaired by Taoiseach Simon Harris.

Mr O’Brien will bring the latest figures on house-build starts, showing building on just over 7,000 new homes started in January and February this year compared to 4,100 the previous year – an increase of 70pc.

In Budget 2025, Tánaiste Micheál Martin wants to see a €10 increase in child benefit as well as a pension increase and another round of winter energy credits. The rate of child benefit is currently €140 per child every month.

Mr Martin denied the potential giveaways were an attempt to throw money at the electorate ahead of a general election.

“I think given how well we manage the public finances and the economy, I think it’s legitimate to signal to people where we intend to go in the next Budget, but also where we tend to go for the next five years,” he told RTÉ’s The Week in Politics.

“We’re also putting huge amounts of money aside in the Future Ireland Fund, and also in the Infrastructure and Climate Fund.

“These funds will provide for generations in terms of pensions, healthcare costs as we’re living longer, and so forth.

“Also in terms of infrastructure, that we will avoid the stop-start nature of infrastructure spending that we’ve had historically.”

Mr Martin also confirmed the Coalition would be postponing an EU referendum.

The Unified Patent Court, which is in place since last year and has 17 EU members, makes it easier for businesses and inventors to prevent their ideas from being copied across the EU. But joining it would require a constitutional change in Ireland.

Mr Martin said the timeline, as well as the other elections, would make it difficult to explain the referendum.

“I was in Limerick last week with Dee Ryan, our mayor candidate, and Cynthia Ní Mhurchú, and I went up to a coffee table and I handed the European leaflet, I handed the local election leaflet for a councillor that was there and I handed the mayor leaflet,” Mr Martin said.

“And if I add a fourth leaflet with a referendum, you begin to see how challenging it becomes for the electorate.”

Asked whether he was surprised to hear that Fianna Fáil TDs, notably the party’s European candidate Lisa Chambers, had campaigned for Yes votes in the last referendums but then voted No, Mr Martin said trust in politics was important.

“Personally, I think people should be upfront about their positions on this,” Mr Martin said.

“It’s not the way I would do business, quite frankly, and I think trust is important in politics,” he added.

On whether he believed that voters in the European election could trust Ms Chambers again after the referendum, Mr Martin said these elections were “of a different order”.

“In fairness, I think Lisa Chambers has explained her position; she said she changed her mind in respect of it,” Mr Martin said.

“It’s of a different order in terms of people’s contribution there and people’s capacity to perform in the European Parliament, and people will judge on that,” he said.