Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

As part of budget 2024, I introduced a personal income tax package to the value of €1.3 billion in 2024 and €1.5 billion in a full year. The tax package is built around three key pillars. These are changes to tax credits, the standard rate band and USC. The Government has sought to use each of these levers to spread the benefit of the available package as effectively as possible.

With regard to income tax, the main tax credits, which are personal, PAYE and earned income tax credits, will be increased by €100 to €1,875. The standard rate band will be increased by €2,000 to €42,000 for single persons, with commensurate increases for married couples and civil partners. As the budget focused on tackling child poverty, I also increased the home carer tax credit by €100 to €1,800, the single person child carer credit by €100 to €1,750 and the incapacitated child tax credit by €200 to €3,500.

I am aware that the USC is a particular point of concern for many people. This is why I introduced the largest USC package since 2016, with a cost of €350 million in 2024. The 4.5% rate of USC was decreased by 0.5% to 4.0% and the ceiling for the 2% rate of USC was increased by €2,840, from €22,920 to €25,760. The increase in the 2% ceiling will ensure that with the increase in the national minimum wage from €11.30 to €12.70 per hour, a full-time worker earning the minimum wage will remain outside the higher rates of USC. Additionally, the reduced rate of USC concession for medical card holders was extended for a further two years until the end of 2025.

To answer the Deputies' questions, I am advised by Revenue that a total of 1.6 million taxpayer units will benefit from the USC measures announced in the budget. A taxpayer unit counts jointly assessed couples as one unit. However, I am further advised by Revenue that this estimate is provided using Revenue’s micro-simulation income tax model, Tax Modeller, and while this model uses taxpayer unit level data, estimates broken down by taxpayer location are not generated as part of the modelling process. Therefore, a county-by-county breakdown of the number of taxpayer units that will benefit from the USC measures announced in the budget is not specifically available.

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