Dáil Éireann Debate, Tuesday - 30 April 2013
186. Deputy Pearse Doherty asked the Minister for Finance if he will set out the matters to which PRSI and universal social charges are currently applied; if he is considering extending PRSI and USC to other forms of income not already subject to the charges. [20068/13]
View answerThe position is that PRSI is payable on an individual’s pay and income after allowing relief for capital allowances. Universal Social Charge (USC) is payable on an individual’s pay and income after allowing for losses incurred in, or capital expenditure incurred for the purposes of a trade. In relation to both PRSI and USC, pension contributions are not deducted in arriving at the amounts payable. However, social welfare payments are not liable to either PRSI or USC. In relation to extending PRSI and USC to other forms of income not already subject to the charge, the position is that, in Budget 2013, I announced that the Minister for Social Protection, Ms. Joan Burton, T.D., would be bringing forward legislation to change PRSI contributions as follows:
- Where modified PRSI rate payers have income from a trade or profession, such income and any unearned income they have will be made subject to PRSI with effect from the 1st of January 2013; and
- Unearned income for everyone else will become subject to PRSI in 2014. This means that PRSI will be payable on income generated from wealth such as rental income, investment income, dividends and interest on deposits and savings.
This means that from this year, modified rate contributors who have income from a profession or trade and who were previously not liable to PRSI on that income, are now liable to PRSI at 4% on such income. From next year, all assessed taxpayers, that is, taxpayers who are in the self-assessment system, will be liable to PRSI on their full incomes including rental income, investment income, dividends and interest on deposits and savings.
In relation to USC, the position is that this tax, like all other taxes, is reviewed annually in the context of the Budget and Finance Bill cycle. The Minister for Social Protection has published a booklet entitled “PRSI contribution rates and user guide from 1 January 2013” which gives more information and is available at http://www.welfare.ie/en/downloads/SW14.pdf. The Revenue Commissioners have published a document entitled “Universal Social Charge FAQs” which gives more information and is available athttp://www.revenue.ie/en/tax/usc/universal-social-charge-faqs.pdf.
