Bernard Durkan (Kildare North, Fine Gael)
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Question 28: To ask the Minister for Finance when a refund of income tax paid will be made in the case of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [4370/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have been advised by the Revenue Commissioners that they are still awaiting further information from the taxpayer concerned before they will be in a position to deal with any possible refund.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The position is that all income tax credits with the exception of the aged tax credits where reduced by approximately 10% in Budget 2011. In addition, the single standard rate band was reduced by approximately 10% and the relationship between the single standard rate band and the additional rate bands was maintained. For example, the one-parent family rate band which is available to widowed parents is still €4,000 greater than the single standard rate band. As the income tax code has many favourable provisions relating to the tax treatment of widowed persons, particularly widowed parents with dependent children, the cumulative effect of the 10% reduction in income tax credits and tax bands in Budget 2011 has seen widowed persons losing more when compared to a single income earner on the same income. However, I would point out that a widowed person is still far better off in terms of net income after deductions when compared to a single individual on the same income.

The Universal Social Charge (USC) was introduced in Budget 2011 and it replaced the Income Levy and Health Levy. The USC is a more equitable charge that applies on a wider base at a low rate. It removes the steps and poverty traps associated with the Income Levy and Health Levy. It should be noted that payments from the Department of Social Protection such as the widowed person's contributory State pension are exempt from the USC. The Universal Social Charge (USC) is applied at the following rates:

· 2% on the first €10,036 (€193 per week)

· 4% on the next €5,980 (€193.01 to €308.00 per week) and

· 7% on the balance.

In addition, I should point out that I introduced a Committee Stage amendment during the Finance Bill 2011, which provides for medical card holders to be chargeable to the USC at the following rates:

· 2% on the first €10,036 (€193 per week)

· 4% on the balance.

Widowed persons in receipt of a widowed person's State pension were previously exempt from the Health Levy and there are no such exemptions from the USC. Therefore, widowed persons will see their net pay reduce as a consequence of the introduction of the USC. However, I would point out again that a widowed person is still better off in terms of net income after deductions when compared to a single individual on the same income.