Robert Troy (Longford-Westmeath, Fianna Fail)
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199. To ask the Minister for Finance his plans to cut the universal social charge for retired pensioners. [39605/15]

Michael Noonan (Limerick City, Fine Gael)
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I announced a number of changes to the Universal Social Charge (USC) in my recent Budget speech which will apply to all income liable to the USC, including occupational pension income of retired pensioners. From the 1st of January next, the entry threshold to USC is being increased from €12,012 to €13,000, removing over 40,000 individuals from the scope of the charge entirely. It is estimated that over 700,000 income earners will not be liable to USC at all from next year.

The three lowest rates of USC are being reduced from 1 January 2016.

-The 1.5 per cent rate is being reduced to 1 per cent. This applies on the first €12,012 of income;

-The 3.5 per cent rate is being reduced to 3 per cent. This applies on income in excess of €12,012 up to an increased threshold of €18,668.

-The 7 per cent rate is being reduced to 5.5 per cent. This applies on income in excess of €18,668 up to €70,044.

The exemption from the top rates of USC for all medical card holders and those over-70 earning less than €60,000 is being retained. This group will also benefit from the reductions in the two lowest USC rates.

These changes will see all those who pay USC in 2015, including retired pensioners, seeing a reduction in their USC bill next year where incomes are equal. I intend to continue to reform the tax system in future budgets, subject to having the required fiscal space.