Parliamentary Question addressed to the Minister for Finance

To ask the Minister for Finance if he will consider either this year or for next year’s budget dealing with the anomaly caused by the €60,000 threshold attracting a 7% universal social charge whereby an income of €60,0011 produces a loss of €1,300 in income; and if he will make a statement on the matter.

Reply

The position is that, in order to ensure equity between all citizens based on their level of income, the reduced rate of Universal Social Charge (USC) will be discontinued from the 1 January 2013, and the standard rates of USC will apply to the following two groups:

– those aged 70 years and over with incomes of €60,000 and above
– medical card holders with incomes of €60,000 and above

I have no plans to review this decision. I would also point out that the additional liability for USC in 2013 for an individual aged 70 years and over or a medical card holder with an income of €60,001 will be approximately €1,320 per annum. I have set out below the relevant USC liability as it applied in 2012 and as it will apply in 2013.

USC Liability for a person aged 70 years and over with income of €60,001
or a medical card holder with income of €60,001

USC Liability in 2012 USC Liability in 2013
€10,036 @ 2% = €200.72 €10,036 @ 2% = €200.72
€49,965 @ 4% = €1998.60 €5,980 @ 4% = €239.20
€43,985 @ 7% = €3,078.95
Total USC €2,199.32 Total USC €3,518.87
Difference in USC Liability €1,319.55