Universal Social Charge Data

Dáil Éireann Debate, Thursday - 26 May 2016

Thursday, 26 May 2016

Questions (59, 79)

Pearse Doherty

Question:

59. Deputy Pearse Doherty asked the Minister for Finance the revenue the universal social charge would generate on the basis of no policy change or its phased abolition or reduction (details supplied), in each of the years from 2017 to 2021, in tabular form. [12256/16]

Pearse Doherty

Question:

79. Deputy Pearse Doherty asked the Minister for Finance the cost of a phased reduction (details supplied) of the universal social charge for each of the years from 2017 to 2021, in tabular form. [12448/16]

Written answers

Minister for Finance

I propose to take Questions Nos. 59 and 79 together.

The following table sets out the broad projected revenues that will be generated by the Universal Social Charge (USC) for each of the next five years.  It should be noted that figures are provided on a no policy change basis, with the figures providing for the indexation of USC thresholds and bands. In addition, it should be noted that for 2017, Exchequer USC receipts are impacted by the carryover effect of Budget 2016 changes and timing effects. 

Forecast for USC	€ Billion*
2017	c. €3.8
2018	c. €4.5
2019	c. €4.5
2020	c. €4.7
2021	c. €4.9

*Exchequer receipts basis

I am advised by the Revenue Commissioners that the following tables set out in detail the estimated cost to the Exchequer of the Universal Social Charge (USC) measures suggested by the Deputy.

These estimated costs do not take into account any change to the USC exemption threshold of €13,000 as set out in Budget 2016.  It should also be noted that while the proposal is set over a five year period, the cost to the Exchequer is realised over a six year timeframe.

In the case of measures reducing or abolishing the lower rates of USC, the costs are estimated on the basis of reducing or abolishing the relevant rates for all income earners, including those also paying higher rates of USC.

These figures are estimates from the Revenue tax forecasting model using latest actual data for the year 2013, adjusted as necessary for income, self-employment and employment trends in the interim. They are estimated by reference to 2016 incomes as is standard notwithstanding that the costings requested refer to the next five years. They are provisional and may be revised. 

First Question Option 1

Measure	Full Cost of Measure €M	Year 1 €M	Year 2 €M	Year 3 €M	Year 4 €M	Year 5 €M	Year 6 €M
Reduce 1% USC rate on income up to €12,012 to 0.5%	-118	-86	-32
Abolish 0.5% USC rate on income up to €12,012	-118		-86	-32
Reduce 3% USC rate on income up to €18,668 to €1.5%	-222			-163	-59
Abolish 1.5% USC rate on income up to €18,668	-222				-163	-59
Raise entry point to 5.5% USC rate from €18,668 to €19,572 and abolish 5.5% rate between €18,668 and €19,572	-72					-53	-19
Total		-86	-118	-195	-222	-112	-19

First Question Option 2

Measure	Full Cost of Measure €M	Year 1 €M	Year 2 €M	Year 3 €M	Year 4 €M
Abolish 1% USC rate on income up to €12,012	-237	-173	-64
Reduce 3% USC rate on income up to €18,668 to €1.5%	-222		-163	-59
Abolish 1.5% USC rate on income up to €18,668 and raise entry point to 5.5% USC rate from €18,668 to €19,572 and abolish 5.5% rate between €18,668 and €19,572	-294			-215	-79
Total		-173	-227	-274	-79

Second Question Option 1

Measure	Full Cost of Measure €M	Year 1 €M	Year 2 €M	Year 3 €M	Year 4 €M	Year 5 €M	Year 6 €M
Abolish 1% USC rate on income up to €12,012	-237	-173	-64
Abolish 3% USC rate on income up to €18,668	-444		-326	-118
Reduce 5.5% USC rate on income up to €70,044 to 3%	-870			-631	-239
Abolish 3% (as actioned in year 3) USC rate on income up to €70,044	-1,044				-758	-286
Raise entry point to top USC rate from €70,044 to €80,044, and abolish 5.5% rate between €70,044 and €80,044)	-148					-99	-49
Total		-173	-390	-749	-997	-385	-49

Second Question Option 2

Measure	Full Cost of Measure €M	Year 1 €M	Year 2 €M	Year 3 €M	Year 4 €M	Year 5 €M	Year 6 €M
Abolish 1% USC rate on income up to €12,012	-237	-173	-64
Abolish 3% USC rate on income up to €18,668	-444		-326	-118
Reduce 5.5% USC rate on income up to €70,044 to 3%	-870			-631	-239
Abolish 3% (as actioned in year 3) USC rate on income up to €70,044	-1,044				-758	-286
Abolish 8% USC rate on income over €70,044 & abolish 11% self employed rate on income over €100,000	-1,108					-634	-474
Total		-173	-390	-749	-997	-920	-474