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Dáil Éireann díospóireacht -
Wednesday, 3 Oct 2001

Vol. 541 No. 2

Written Answers. - PRSI Contributions.

Gay Mitchell

Ceist:

370 Mr. G. Mitchell asked the Minister for Finance if his attention has been drawn to the fact that PRSI contributions are charged on every pound over £280; if his attention has further been drawn to the fact that this causes hardship for retired persons (details supplied) in Dublin 12 on relatively small income; and if he will raise the threshold. [21302/01]

Employees in the private sector paying Class A PRSI contribution rates are liable for PRSI on a weekly earnings, non cumulative basis, as follows – under £30 per week, no employee contribution is payable and the individual is covered only for occupational injuries benefit; £30 – £226 per week, no employee contribution is payable, but the individual is covered for the full range of benefits; £226.01-£280 per week, the employee receives a weekly PRSI allowance of £100 and pays a contribution rate of 4% on the balance; earnings in excess of £280 per week, the employee receives his/her £100 weekly PRSI allowance and pays a rate of 4% on the balance. However, a health levy of 2%, which is unrelated to the PRSI but which is collected through that system, becomes payable on the first £1 of weekly income.

Retired persons or employees over the age of 66 years who may be in subsidiary employment are not liable for PRSI contributions. Medical card holders, which now includes all aged 70 and over, are not liable for the 2% health levy contribution. The position with regard to the health levy is that the low income threshold below which the levy is not payable, is currently £14,560 per annum or £280 per week. Arising from the change in the tax year to a calendar year basis, the annual threshold will be £10,775 for the 2001 short tax year, that is, 74% of the current threshold of £14,560. I have no plans to adjust either the annual or weekly thresholds at this point. However, as is normal, I will look at all these issues in the context of the annual budget.
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