Written answers

Thursday, 1 May 2014

Photo of Billy TimminsBilly Timmins (Wicklow, Independent)
Link to this: Individually | In context | Oireachtas source

41. To ask the Minister for Finance the position regarding old age pensioners over 80 years of age; if they are required to pay USC on their pensions; and if he will make a statement on the matter. [19751/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The USC was introduced in Budget 2011 to replace the Income Levy and Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and raise revenue to reduce the budget deficit. It is a more sustainable charge than those it replaced.  It is applied at a low rate on a wide base. 

As you are aware, delivering on a commitment in the Programme for Government, the USC was reviewed by my Department in the lead up to Budget 2012. The report is available at www.finance.gov.ie. As a result of the review of the USC, the Government decided in Budget 2012 to increase the entry point to the Universal Social Charge from €4,004 to €10,036 per annum. It is estimated that this removed almost 330,000 individuals from the charge.  

Occupational pensions are liable to the USC, if the payment is greater than the exemption limit, which from 1 January 2012 is €10,036 per annum.  However, individuals who are aged 70 years and over and whose income does not exceed €60,000 only pay the reduced rate of 4% on all income above €10,036, or 7% on any income from self-employment that exceeds €100,000. The USC, like the Income Levy before it, does not apply to payments made by the Department of Social Protection, including State pensions.  Furthermore, such payments will not be taken into account in determining if an individual has exceeded the €60,000 threshold.

Comments

No comments

Log in or join to post a public comment.