Brian Lawless / PA Wire Brian Lawless / PA Wire / PA Wire

WE’VE KNOWN FOR quite some time that the Universal Social Charge (USC) is to be cut.

Today we found out by just how much.

Finance Minister Michael Noonan announced today a range of changes to the much-disliked tax, including:

• A 1.5% reduction in the 7% rate which will now drop to 5.5%.
• The 3.5% and 1.5% rates will be reduced by 0.5%

The threshold at which people will have to pay different rates of USC will also change.

• The threshold to the new 3% rate will be widened to over €18,688, an increase of over €1,000
• The threshold to the new 5.5% rate will also rise from €17,756 to €18,668 up to €70,044.

An individual who is earning €32,000 per year will pay the Universal Social Charge at a rate of 1% on the first €13,000 (which comes to €130), 3% on the next €5,668 (which comes to €170.04) and 5.5% on the balance of €13,312 (which comes to €732.16). In total this person will pay €1,032.20 per year. This is a reduction of €352.

The entry point for those who have to pay the USC will rise from €12,012 to €13,000.

You do not pay the Universal Social Charge if your total income for a year does not exceed €13,000. An individual who is earning €13,100 per year will pay 1% on that €13,000 and 3% of the remaining €100.

The exemption from the top rate of USC is for medical card holders and those over 70 earning less than €60,000.

Below are the USC rates and bands BEFORE today’s Budget announcement, as a point of reference.

Citizens Information Citizens Information

Find out how Budget 2016 will affect you with TheJournal.ie’s calculator>

Read: All the breaking news from today’s Budget>>>