WE’VE KNOWN FOR quite some time that the Universal Social Charge (USC) is to be cut.
Today we found out by just how much.
Finance Minister Michael Noonan announced today a range of changes to the much-disliked tax, including:
- A 1.5% reduction in the 7% rate which will now drop to 5.5%.
- The 3.5% and 1.5% rates will be reduced by 0.5%
The threshold at which people will have to pay different rates of USC will also change.
- The threshold to the new 3% rate will be widened to over €18,688, an increase of over €1,000
- The threshold to the new 5.5% rate will also rise from €17,756 to €18,668 up to €70,044.
An individual who is earning €32,000 per year will pay the Universal Social Charge at a rate of 1% on the first €13,000 (which comes to €130), 3% on the next €5,668 (which comes to €170.04) and 5.5% on the balance of €13,312 (which comes to €732.16). In total this person will pay €1,032.20 per year. This is a reduction of €352.
The entry point for those who have to pay the USC will rise from €12,012 to €13,000.
You do not pay the Universal Social Charge if your total income for a year does not exceed €13,000. An individual who is earning €13,100 per year will pay 1% on that €13,000 and 3% of the remaining €100.
The exemption from the top rate of USC is for medical card holders and those over 70 earning less than €60,000.
Below are the USC rates and bands BEFORE today’s Budget announcement, as a point of reference.
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