Dáil Éireann Debate, Tuesday - 15 October 2013
16. Deputy Shane Ross asked the Minister for Finance the reason a person (details supplied) in County Dublin is subject to the universal social charge on their streamed severance pay; and if he will make a statement on the matter. [43676/13]
View answerThe position is that the Universal Social Charge (USC) was introduced from 1 January 2011 to replace the Income Levy and the Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and raise revenue to reduce the budget deficit. The USC is an annual tax payable on an individual’s total income in a year, subject to a number of exemptions and reliefs. In particular, an individual is not liable to pay USC where his or her total income in the tax year does not exceed €10,036. In addition, payments from the Department of Social Protection such as the State Pension are exempt from the USC and such payments will not be taken in to account in determining if an individual has exceeded the €10,036 threshold.
As the person in question is in receipt of income from her former employer she is liable to pay the USC on that income and on the income she is receiving from her current employment.
I should add that where an individual receives a lump sum “redundancy payment” Universal Social Charge would be payable on any part of the lump sum which is not exempt from income tax.
