Tuesday 13th October 2015
- Universal Social Charge (USC) reduced
- Self-employed tax credit introduced
This significant reduction in the USC will help ensure that every worker in Cork and throughout Ireland benefits from the economic recovery that is underway. Reducing USC from 7% to 5.5% on people’s earnings between €18,668 and €70,044 will make a significant difference for working families and individuals. This reduces the tax rate on low and middle income earners to below 50% for the first time since 2009.
Minister Noonan has increased the entry point for USC payment to €13,000, meaning a further 42,000 workers will no longer have to pay the USC. Over 700,000 of the lowest paid workers will be exempt from the paying the USC from January. This change will give a week’s wages back to low and middle income earners.
The introduction of a €550 self-employed tax credit marks a welcome start along the road to the equalisation of income tax credits between self-employed people and PAYE workers, addressing what was an unfair treatment of self-employed people in this country. The Earned Income Credit of €550 will be available to self-employed people who are ineligible for a PAYE credit on their salaries and will really benefit small retailers, publicans, farmers and tradesmen in Cork.
Taken together both of these measures will improve the take home pay of all workers. This will have a benefit to families and to our domestic economy. I welcome the cuts to the Universal Social Charge, meaning the marginal rate of tax for those earning below €70,000 will fall below 50% for the first time since 2009. Changes to the USC entry threshold will mean a total of 700,000 people will now be outside the USC net.
Today’s USC reduction is the second year in a row that we have reduced the tax burden on low and middle-income earners. The top priority of this budget is to sustain our economic recovery and bring its benefits to every family.