Seán Fleming (Laois-Offaly, Fianna Fail)
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238. To ask the Minister for Finance where people have worked for a number of years and are now on a pension and continue to pay the USC on their pensions and on their new employment in recent times, if the USC is charged in respect of their combined income; and if he will make a statement on the matter. [42699/24]

Jack Chambers (Dublin West, Fianna Fail)
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The Universal Social Charge (USC) was designed and incorporated into the Irish taxation system in 2011 to replace two other charges, namely the Health and Income Levies. Its primary purpose was to widen the tax base and to provide a steady income to the Exchequer to provide funding for public services.

The USC is an individualised tax, meaning that a person’s liability to the tax is determined on the basis of his/her own individual income and personal circumstances. The USC is applied at a low rate on a wide base, which ensures that it is a stable and sustainable source of revenue for the State.

The USC is an annual tax payable on an individual’s total income in a year, however this is subject to some exemptions. Like the Income Levy before it, USC does not apply to social welfare payments, such as the contributory and non-contributory State pensions. However, occupational pensions are liable to the USC if the payment is greater than the exemption threshold. Currently individuals with incomes of less than €13,000 are exempt from USC which can include modest occupational pensions.

Individuals aged 70 and over or who hold a full medical card can benefit from a reduced rate of USC, provided their total income does not exceed €60,000 per annum. In addition, social welfare income such as the contributory and non-contributory State pensions are excluded from the calculation when determining if an individual’s income has exceeded the €60,000 income threshold.

Revenue's website sets out further information on the USC and that information is accessible at:

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Finally, I might take this opportunity to note that Ireland has one of the most progressive personal income tax systems in the world, which plays a crucial role in the process of income redistribution. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI. It is my view that a broad-based, progressive income tax system, where the majority of income earners make some contribution but according to their means, is the most fair and sustainable income tax system in the long term.