Dáil Éireann Debate, Tuesday - 10 December 2013
129. Deputy John O'Mahony asked the Minister for Finance the reason a person (details supplied) in County Mayo is being charged universal social charge on money saved before the charge was introduced; and if he will make a statement on the matter. [52690/13]
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 only charged on income and not on capital or savings, and it only applies where an individual has an aggregate income for a year in excess of €10,036. Where an individual in the PAYE system has income in excess of that amount, the rates of USC are as follows:
The first €10,036 @ 2%.
The next €5,980 @ 4% and
The balance @ 7%.
However, where an individual is aged 70 or over, or is the holder of a full medical card, and has income of €60,000 per annum or less, they will not be liable to the top rate of charge. For such individuals the rates of charge are as follows:
2% on the first €10,036 of income;
4% on all income over that amount.
I am advised by the Revenue Commissioners that the person in question is in receipt of an occupational retirement pension and is also in receipt of a small pension or distribution from an Approved Retirement Fund. As the person's aggregate income exceeds €10,036, both of these sources of income are liable to USC. As stated earlier, the USC is charged on annual income paid to the individual and is not charged on capital.
