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Here's what's changed with the Universal Social Charge in the Budget

The much-hated USC has been cut.

Irish budget 2016 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.

usc 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>>>

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    Mute Gizmo mac
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    May 17th 2014, 9:04 AM

    They can meet in Ennis and have their combined rag week so!

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    Mute Lester Jeffcoat
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    May 17th 2014, 9:21 AM

    Brilliant. I alway said that what the Atlantic Corridor needs is a framework to enhance collaboration. I’m just amazed that a multi-stakeholder regional cluster hasn’t been envisaged before now.

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    Mute Yako
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    May 17th 2014, 2:14 PM

    I am not convinced. I would use the example of silicon valley a region we should emulate. There you have a region with a huge amount of institutions doing their things and competing. No federally driven mergers or amalgamations. Take the example of Caltech, a small but amazingly successful IT. Give the institutions more autonomy and a fixed budget and let them compete.

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    Mute Fergal Reid
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    May 17th 2014, 11:13 AM

    For a country of 4.5 million people, we sure have an endless number of third level institutions.

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    Mute Chris Chris
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    May 17th 2014, 11:38 AM

    First Tipperary Institute merged with LIT now GMIT. Why does this country think centralisation and merging is the answer to everything. It’s a just a ruse for more cuts but the people are too stupid to see it. Same with the abolition of the urban councils. A cash grab on the rich urban councils to save rural Ireland. Name one situation where centralisation/mergers has worked in this country?

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