Michael McGrath (Cork South Central, Fianna Fail)
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255. To ask the Minister for Finance the cost in 2016 and in a full year of exempting an additional 42,000 income earners from the universal social charge; and if he will make a statement on the matter. [36602/15]

Michael McGrath (Cork South Central, Fianna Fail)
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258. To ask the Minister for Finance the cost in 2016 and in a full year of reducing the 1.5% rate of the universal social charge to 1%; and if he will make a statement on the matter. [36605/15]

Michael McGrath (Cork South Central, Fianna Fail)
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259. To ask the Minister for Finance the cost in 2016 and in a full year of reducing the 3.5% rate of the universal social charge to 3% and increasing the range of income it covers; and if he will make a statement on the matter. [36606/15]

Michael McGrath (Cork South Central, Fianna Fail)
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260. To ask the Minister for Finance the cost in 2016 and in a full year of reducing the 7% rate of the universal social charge to 5.5%; and if he will make a statement on the matter. [36607/15]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 255 and 258 to 260, inclusive, together.

I am informed by the Revenue Commissioners that the estimated first and full year cost to the Exchequer of exempting an additional 42,000 income earners from the Universal Social Charge (USC), is in the region of €8 million and €11 million respectively.

The estimated first and full year cost to the Exchequer of reducing the 1.5% USC rate to 1% is in the order of €89 million and €121 million respectively.

In relation to reducing the 3.5% USC rate to 3%, the estimated first and full year cost to the Exchequer is in the order of €49 million and €66 million respectively.

In response to the question of reducing the 7% USC rate to 5.5%, the estimated first and full year cost to the Exchequer is in the order of €397 million and €546 million respectively.

The Deputy will note that these costings do not take into account the full range of changes to the USC announced in Budget 2016.

All figures provided above are based on the pre-Budget 2016 USC structure, including band thresholds, and are estimates for 2016 incomes from the Revenue tax forecasting model using latest actual data for the year 2013, adjusted as necessary for income, self-employment and employment trends in the interim. They are provisional and may be revised.

Michael McGrath (Cork South Central, Fianna Fail)
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256. To ask the Minister for Finance the reason the Government did not fulfil the commitment, made at the time of the Spring statement, to exempt an additional 90,000 income earners from the Universal Social Charge; and if he will make a statement on the matter. [36603/15]

Michael Noonan (Limerick City, Fine Gael)
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I announced in my Budget speech last week that the entry point to the Universal Social Charge (USC) is being increased to €13,000 per annum from 1 January next. It is estimated that over 700,000 income earners will not be liable for USC at all from next year. The entry point to the USC was €4,004 when I came into Government and this is my third occasion to increase the entry point - it was increased to €10,036 with effect from 2012, and to €12,012 from the tax year 2015.

The increase in the entry point was just one element of a package of measures designed to reward work.

The reform of the USC system which saw the bottom three rates reduced by between 0.5 and 1.5 percentage points, the decision to accept the proposals of the low pay commission and increase the minimum wage by 50 cent per hour from the 1^stof January, the increase of the Family Income Supplement, the introduction of the PRSI credit for low earners and the increase in Child Benefit were key elements of this package of measures.

Looking at package as a whole, I think that we struck the correct balance and that keeping 700,000 individuals, or 29% of income earners, exempt from the charge was appropriate.

As the Deputy will be aware, the numbers liable to USC are not constant and are affected by economic conditions generally. As the economy continues to improve, incomes increase and new jobs are created. These factors have the effect of increasing the numbers earning in excess of the entry point to the USC, and thus more income earners are brought within the scope of the USC.

The changes announced in Budget 2016 will see all those who pay USC in 2015 benefitting from a reduction in their USC bill next year for the same level of income.