Eoghan Murphy (Dublin South East, Fine Gael)
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206. To ask the Minister for Finance his views on a matter regarding universal social charge rates for those over 70 years of age (details supplied). [40850/13]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, when the USC was introduced in Budget 2011, those aged 70 years and over were not liable to the top rates of charge. The maximum rate of charge for such individuals was 4% irrespective of the level of their income, unless they had self-employment income in excess of €100,000 for a tax year, in which case the maximum rate was increased to 7% on the amount of income in excess of €100,000. However, given the current budgetary constraints and the need to raise revenue, the Government decided in Budget 2013 that the reduced rates of USC for those age 70 years and over, and medical card holders, with an income in excess of €60,000, would be discontinued from 1 January 2013. Although the introduction of a step effect is never ideal, it is necessary to achieve the desired yield. Similar step effects can also be seen for the threshold at which the 2% rate of USC applies.

It is important to point out that payments from the Department of Social Protection such as the State Pension are exempt from the USC. Furthermore, such payments will not be taken in to account in determining if an individual has exceeded the €60,000 threshold. This measure ensures equity between all citizens with incomes in excess of €60,000.