Dáil Éireann Debate, Thursday - 18 July 2013
105. Deputy Ciara Conway asked the Minister for Finance the progress that has been made in applying the universal social charge to pensions worth over €60,000 a year for the over-70s; and if he will make a statement on the matter. [36074/13]
View answerI assume the Deputy is referring to my Budget day announcement that "in order to ensure equity between all citizens based on their level of income, the reduced rate of USC for those over seventy with an income in excess of €60,000 will be discontinued from the 1st of January 2013 and the standard rates of USC will apply". This measure was legislated for in Section 3 of the Finance Act 2013 and took effect from 1 January 2013.
As the Deputy will be aware, when the USC was introduced in Budget 2011, those aged 70 years and over were not liable to the top rates of charge. The maximum rate of charge for such individuals was 4% irrespective of the level of their income, unless they had self-employment income in excess of €100,000 for a tax year, in which case the maximum rate was increased to 7% on the amount of income in excess of €100,000. However, given the current budgetary constraints and the need to raise revenue, the Government decided in Budget 2013 that the reduced rates of USC for those aged 70 years and over and medical card holders with an income in excess of €60,000 would be discontinued from 1 January 2013. Therefore USC has always applied to pension incomes over €60,000 and only the rate was increased in the last Budget.
It is important to point out that payments from the Department of Social Protection such as the State Pension are exempt from the USC. Furthermore, such payments will not be taken into account in determining if an individual has exceeded the €60,000 threshold.
This measure ensures equity between all citizens with incomes in excess of €60,000.
