Advisors.ie

The expression ‘at least Dick Turpin wore a mask’ is used to describe the times somebody robs you blind right to your face. This week I’m sure almost every person in the country could identify with that statement as they watched the twin forces of Michael Noonan and Brendan Howlin unleash cuts that hurt just about everybody, at least they didn’t discriminate.

A few weeks ago I wrote about the way that politicians will hammer regular people always and without fail, a few of you wrote back saying it didn’t have to be like that, and my response was (and is) that it remains the fastest and easiest road to take, which is why people of every political ideology end up doing it.

The budget this year was a sneaky one, some promises were kept, like not raising income tax, some were broken like Labours promise to protect children’s allowance.

Personally, I think that an ‘income tax’ is any tax that reduces your earned income, but in politician-speak (which is the language of serpents) PRSI and Universal Social Charge are not ‘income taxes’, they are merely taxes on your income, which sound like one in the same thing.

But by strict definition they are not, by strict definition PRSI is an insurance payment and USC is on ‘all income’ but as so many people are PAYE workers it acts like an income tax. And this feeds into why we are hearing that the average family will be 1,000 a month less well off at a minimum.

In the past when you earned more than 356 a week you got an exemption on PRSI for the first 127 a week (below that you are exempted from PRSI entirely), but now you’ll pay 4% on that which will steal another 260 a year from you.

This creates a situation where you could get a raise but have a lower ‘net take home pay’, if you got a raise from 350 a week to 360 a week PRSI kicks in on the full amount (at 350 you pay none) so your take home pay would actually drop by getting a rise!

The other thing we have looked at in the past is how so many illegal cigarettes are smoked in Ireland, about 1 in 4. So how does raising the tax on them not encourage people to opt for buying the smuggled version of the same product for half the price?!

Property tax was a big issue, but for many people it won’t be as costly as the change in PRSI is, showing that Government are willing to use sneaky stealth tactics that are not easily understood to rob us blind, and in return you won’t be getting more of anything – except for more austerity!

So having been financially buggered, I think it is only fair to offer some money tips to counteract the budget.

First, re-broker every insurance you have, even as a person who is a qualified broker I sometimes forget to do this, research the market, I moved one property insurance policy from RSA last year and saved 150! Also double check your ‘rebuild cost’ on your insurance and compare against the SCSI ‘building costs’ tables, because construction prices have fallen meaning you may be over insured.

Another thing you should do if you have non-mortgage protection life insurance is to see if you can get tax relief on it by changing over to a section 785 policy which is allows you to use pension allowances to get the cost of the cover down!

When it come to health insurance, check out www.hia.ie and compare costs, then when you call to take out a policy as for the ‘corporate equivalent’ plan, this plan will not be offered to you, but legally you are able to buy it, the savings can be in the hundreds!

Make your savings go farther by getting your money out of banks that are paying ever lower interest rates on deposits and put it into the likes of An Post who offer far better rates than the banks do!
And then claim back some taxes, the majority of people have unclaimed expenses they can get money back on! Go to Revenue.ie and register with ‘PAYE any-time’, it’s easy and fast, you can go back four years and get money back on bin charges, management fees, education, medical expenses, rent relief and many other expenses, the vast majority of people forget to do this!

Then get a forensic financial review, these are often available for about 200 and your advisor should be able to show you ways to save even more! After all, the best defence is a good offence, and to defend yourself  against this lot you’ll want to be bringing your A-game!

taken from our Sun on Sunday weekly column