Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context

Question 53: To ask the Minister for Finance the position regarding a matter (details supplied) regarding widowers; and if he will make a statement on the matter. [38122/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

Individuals in receipt of payments from the Department of Social Protection such as Widow/er's Contributory Pension, Widow/er's Non-Contributory Pension, Deserted Wife's Benefit, Deserted Wife's Allowance or the One Parent Family Payment were exempt from the Health Levy on non-Department of Social Protection income but are not exempt from the Universal Social Charge (USC) on this income. All Department of Social Protection payments, including those mentioned above, are exempt from the USC. Therefore, only non-Social Protection income, if there is any, is subject to the USC.

Medical Card holders pay a concessionary higher rate of USC of 4%. This is a transitional measure and will cease at the end of 2014.

It should be noted that individuals in receipt of a Widow/er's (Contributory) Pension pay less tax than other individuals on the same gross income. This is particularly true of the lower paid widows/widowers, who have an effective tax rate 7.5 percentage points below other income earners on the same income.

At all income levels the widows/widowers pay less taxes and charges. This is because (i) the Widow/er's (Contributory) Pension is not subject to the USC or PRSI and (ii) Widows/widowers receive a higher personal tax credit of €2,190 per annum (€540 greater than the personal tax credit).