Wednesday, 6 November 2019
Department of Finance
Universal Social Charge Application
78. To ask the Minister for Finance if employees who have reached the pensionable age of 66 years of age but who continue working are still liable for the universal social charge; and if he will make a statement on the matter. [45697/19]
Individuals will continue to pay Universal Social Charge (USC) as normal up to the age of 70. Reduced rates of USC apply for those aged over 70 with total annual income of less than €60,000. This ensures that the highest rate of USC paid on income is 2%.
There is no charge to PRSI (Pay Related Social Insurance) for those aged over 66.
Additionally, a person aged 65 and over is fully exempt from income tax where his or her total income from all sources is less than the relevant exemption limit. For 2019, the exemption limits are €36,000 for a married couple or civil partners and €18,000 for a single individual. Where an individual exceeds the exemption limit, he or she is liable to tax based on the normal system of rate bands and tax credits, subject to marginal relief where relevant.
Other tax supports for individuals in this age group include the Age Tax Credit which is available to all individuals aged 65 or over who do not qualify for an exemption from income tax. This credit is currently set at €245 for single individuals or €490 for a married couple or civil partners.
I would also note that the State Contributory Pension and the State Non-Contributory Pension are not chargeable to Universal Social Charge (USC) or Pay Related Social Insurance (PRSI).
In the context of limited resources, I am satisfied that the current USC system is fair and equitable to individuals who are over the age of 66.