Dáil Éireann Debate, Tuesday - 28 February 2017
226. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of abolishing the universal social charge, USC, and the impact on fiscal space in 2018, 2019, 2020, 2021 and 2022; and if he will make a statement on the matter. [10054/17]
Amharc ar fhreagraThe fiscal forecasts contained in Budget 2017 set out projections in respect of 2017 to 2021. Projections beyond 2021 are not available at this stage.
The indicative net fiscal space over the 2018 to 2021 period is some €9.3 billion in cumulative terms (as outlined in Budget 2017 Table A7).
It should be noted that indicative fiscal space highlighted in the budgetary annexes require a number of assumptions, including in relation to reference rates for potential growth, deflators and certain other variables used in calculation. These inputs are based on current projections and are likely to change over time.
In 2017, the Universal Social Charge (USC) is projected to raise approximately €3.7 billion in Exchequer receipts terms, with this level expected to increase, on a dynamic basis, as employment and wage growth are projected to continue over the forecast horizon. This projection incorporated the €335 million first year cost of the USC changes announced in the recent Budget. It is estimated that the Budget 2017 USC measures would cost €385 million in a full year.
The actual cost of abolishing the USC over the medium term, i.e. to 2021, would be impacted by the phasing used but in terms of the broad order of magnitude, it would absorb around 40% of the currently available net fiscal space out to 2021.
