Mattie McGrath (Tipperary South, Independent)
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Question 372: To ask the Minister for Social Protection the reason the universal social charge is not discounted from gross income in the assessment of means for social welfare payments when it results in a significant difference in the take home pay; her views that this is extremely unfair and is having a negative effect on social welfare applicants; her plans to review this matter; and if she will make a statement on the matter. [41107/11]

Joan Burton (Dublin West, Labour)
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The earnings assessed for social assistance means testing purposes generally is based on earnings net of PRSI contributions, superannuation/PRSA contributions and trade union subscriptions. No account is taken in the calculation of any income taxes payable on earnings i.e. the assessment is based on gross earnings before tax. Given that the universal social charge is a tax, the impact of this charge is, therefore, not taken into account when means testing welfare entitlements.

The one exception to this arrangement relates to entitlement to Family Income Supplement. This has been, for many years, assessed net of all statutory charges including income tax. This approach has been continued and the universal social charge is taken account of for the purposes of entitlement to this scheme.

The programme for government contained a commitment to review the universal social charge. This review was completed by the Department of Finance, and Budget 2012 contained a number of changes to the USC that will help low paid, part-time and seasonal workers. From 1 January 2012, the exemption level has been raised from €4,004 to €10,036 (€193 per week). This measure will benefit nearly 330,000 people including part-time workers in receipt of primary weekly welfare payments.