UNIVERSAL SOCIAL CHARGE (USC)

Joey the lips

My brain is fuzzed so much by this charge i just cannot understand it... Can you please explain it simply...

Married Man on 33000

How much is this new charge.

Thanks

shaddupayaface

ncef4208 wrote: »

If you have a full medical card not gp card, you were not liable for income levy nor the health levy, they did not announce that this was to change
o

The Income Levy and Health Levy have been abolished and replaced with this Universal Social Charge.

They did not announce whether MC holders are exempt or not. They did state that there are no special exemptions from this USC....maybe that means no "new" special exemptions.

No-one will know for sure until the question is asked and answered by the Department.

If MC holders are liable for this charge, I suspect there there will be uproar.....

wicorthered

Joey the lips wrote: »

My brain is fuzzed so much by this charge i just cannot understand it... Can you please explain it simply...

Married Man on 33000

How much is this new charge.

Thanks

You shouldn't lose too much in fact you could even end up a couple of euro. What you pay in USC should be similar to the health and income levies.

DubDani

Joey the lips wrote: »

My brain is fuzzed so much by this charge i just cannot understand it... Can you please explain it simply...

Married Man on 33000

How much is this new charge.

Thanks

2% on €10,036 = 200.72
4% on €5980 = 239.20
7% on €16984 = 1188.88

So you will pay 1628.80 a year (in effect 4.936%), which is less then you paid this year in Halth and Income levy (1980), and in effect be more then 350 Euro better off (only basing this on USC vs. Income/Health Levy).

Joey the lips

wicorthered wrote: »

You shouldn't lose too much in fact you could even end up a couple of euro. What you pay in USC should be similar to the health and income levies.

DubDani wrote: »

2% on €10,036 = 200.72
4% on €5980 = 239.20
7% on €16984 = 1188.88

So you will pay 1628.80 a year (in effect 4.936%), which is less then you paid this year in Halth and Income levy (1980), and in effect be more then 350 Euro better off (only basing this on USC vs. Income/Health Levy).

Thank you both... I did not pay a health levy...I think. I just paid the normal levy...

Is the health levy related to Health insurence.

dvpower

Joey the lips wrote: »

My brain is fuzzed so much by this charge i just cannot understand it... Can you please explain it simply...

Married Man on 33000

How much is this new charge.

Thanks

You save €339 on the new charge (compared with the levies).
But you'll pay an extra €540 in Income tax

wicorthered

Joey the lips wrote: »

Thank you both... I did not pay a health levy...I think. I just paid the normal levy...

Is the health levy related to Health insurence.

I think the health levy is paid as part of your PRSI, it is paid on earnings over 25000k. You may not have seen it on a payslip but paid it anyway.

I could easily be wrong!!

superhooper

Taken from the Chartered Accts Website.http://http://www.charteredaccountants.ie/General/News-and-Events/News1/2010/December/Universal-Social-Charge/
"Budget 2011 - Universal Social Charge

Tuesday, December 07, 2010
A new Universal Social Charge (USC) will be introduced to replace both the health levy and income levy. The charge will apply to all income at rates between 2% and 7%, once annual income exceeds €4,004.

The USC will apply in 2011 at the following rates:

0% where income is less than €4,004

2% on income up to €10,036

4% on €10,036 to €16,016

7% on income greater than €16,016

The USC will apply on a similar basis to the Income Levy with no special exemption. Pension contributions will not have an exemption from the charge, however, there will be an exemption from the charge for ‘genuine’ business capital allowances. It is expected that a lower rate will apply for those over 70; however no details of this lower rate are available yet.

According to Dept of Finance Budget summary measures, the USC is designed to apply across income levels in a smoother progression and at the same time address the complex structure of the Income and Health Levies and PRSI. One consequence, unintended or otherwise, is that the application of the USC to higher income levels serves to reduce the maximum marginal rate of tax from 56% to 52%.

The USC is expected to yield €420 million in a full year"

DubDani

Joey the lips wrote: »

Thank you both... I did not pay a health levy...I think. I just paid the normal levy...

Is the health levy related to Health insurence.

On your income you pay 4% Health Levy on the full 33K. In your payslip it most likely is included in your PRSI amount.

dvpower

Joey the lips wrote: »

Thank you both... I did not pay a health levy...I think. I just paid the normal levy...

Is the health levy related to Health insurence.

You probably do pay it (4%). It's normally just included in your PRSI deduction.

shaddupayaface

Bad news for MC Holders, it's there in black and white, see USC document on the link below

2.4 I have a medical card – do I pay Universal Social Charge on my wages?

[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]Persons entitled to a full medical card are not excluded from the Universal Social Charge. The exemption that existed for people who hold a full medical card in relation to income levy is not a feature of Universal Social Charge.

http://www.revenue.ie/en/press/budget/2011/index.html
[/FONT][/FONT]

susie05

2.4 I have a medical card – do I pay Universal Social Charge on my wages?
Persons entitled to a full medical card are not excluded from the Universal Social Charge. The exemption that existed for people who hold a full medical card in relation to income levy is not a feature of Universal Social Charge.

http://www.revenue.ie/en/press/budget/2011/index.html

hexx

susie05 wrote: »

2.4 I have a medical card – do I pay Universal Social Charge on my wages?
Persons entitled to a full medical card are not excluded from the Universal Social Charge. The exemption that existed for people who hold a full medical card in relation to income levy is not a feature of Universal Social Charge.

http://www.revenue.ie/en/press/budget/2011/index.html

Well that's that, time to cruch the numbers and make some serious decisions. :mad::mad::mad::mad:

snowdaze

I too fall in to the bracket of having a medical card but working as a low paid public servant.....the extra that will be taken from me in taxes and usc will leave a deficit that will be made up by FIS.....doesn't make sense to take it off you with one hand and give it back with the other???

Ogham

snowdaze wrote: »

I too fall in to the bracket of having a medical card but working as a low paid public servant.....the extra that will be taken from me in taxes and usc will leave a deficit that will be made up by FIS.....doesn't make sense to take it off you with one hand and give it back with the other???

It does make sense - it is a way of protecting lower income families from the extra taxes. You will be like many others - where FIS will rise and the overall drop in income will be less than 1%. Hopefully they planned it that way - or then again ??:rolleyes:

pS - Med card definitely not excluded from new USC ..
Update on http://www.moneyguideireland.com/universal-social-charge.html
Says .....
Persons entitled to a full medical card are not excluded from the Universal Social Charge. The exemption that existed for people who hold a full medical card in relation to income levy is not a feature of Universal Social Charge.

Draco

Blowfish wrote: »

I'm not sure that's correct, from playing around with it, it actually shows that if you earn between 26100 and 32200, your take home will increase.

It looks like that's a reversal of a pervious PRSI anomly where somone earning €26000.1 would pay €20 more tax than someone on €26000. As far as we* can figure out from the current information, this is all correct.

* I wrote the software behind TaxCalc.ie while my payrole expetert girlfriend provided the tax knowledge)

bamboozler

Draco wrote: »

It looks like that's a reversal of a pervious PRSI anomly where somone earning €26000.1 would pay €20 more tax than someone on €26000. As far as we* can figure out from the current information, this is all correct.

* I wrote the software behind TaxCalc.ie while my payrole expetert girlfriend provided the tax knowledge)

your taxcalc.ie budget 2011 calculator is great and very easy to use.

could i just recommend maybe it should be stated the health levy is included as part of the PRSI total in budget 2010 calcs cos that isnt that clear. Also if another line could be added to break the net difference into a weekly it would be handy for quicker comparison.

that said, great calculator anyway thanks

Blowfish

Draco wrote: »

It looks like that's a reversal of a pervious PRSI anomly where somone earning €26000.1 would pay €20 more tax than someone on €26000. As far as we* can figure out from the current information, this is all correct.

* I wrote the software behind TaxCalc.ie while my payrole expetert girlfriend provided the tax knowledge)

Indeedy, I've checked it with various other calculators and it's perfectly correct. It just seemed quite odd at first that given the circumstances, there'll be a certain section of people coming out of this budget better off than before.

woody1

oh joy down another 2 grand a year , thanks to no medical card exemption, what a start to the day !!!
im not normally prone to depression, im normally a chin up , stay positive and we'll get thru it kind of person but this is just a serious kick in the bollocks this morning......
minus childrens allowance and new tax bands / credits, i dont even want to think about it..

paconnors

This is ridicules because of this new social charge my wages are down nearly €30 a week and i'm only on 430 before any deductions **** fianna fail

Kristopherus

woody1 wrote: »

oh joy down another 2 grand a year , thanks to no medical card exemption, what a start to the day !!!
im not normally prone to depression, im normally a chin up , stay positive and we'll get thru it kind of person but this is just a serious kick in the bollocks this morning......
minus childrens allowance and new tax bands / credits, i dont even want to think about it..

I think you have reflected the feeling of most people with that post.

woody1

ok ive been looking at various tax calculators and they have my better half down by 760 quid a year , not bad youd say, but thats not completely accurate as she was exempt from income levy last year so thats 880 we didnt have to pay last year, and i see a difference of 1860 less in prsi for this year , which i assume is the health levy ,she didnt have to pay that last year either,
so to make it accurate we are paying 760 + 880 + 1860 more than last year = 3500, or 300 quid a month .. (plus the childrens allowance and deductions in s/w )
can someone please tell me in wrong...
i know these calculators are just averaging out and wouldnt be 100% accurate , itd be an idea to put a question on them to ask are you a medical card holder and that would give a more accurate idea to some people...

county man

susie05 wrote: »

my dh left the house this morning saying 'theres no point anymore' whats the point of me working & you know what i couldnt even console him because with the no medical card exemption & income tax increase he is going to be down €200 + a month...we simply wont have enough to cover mortgage & loan & buy groceries....we F*cked..i never slept a wink last night

I feel sorry for you and we will all be hit with more taxes and levies next year and the following years starting with the property tax of 100 euro in 2011 which will increase in the following years.Also there will be a water tax carbon tax and God knows what else in store.

egan2020

susie05 wrote: »

my dh left the house this morning saying 'theres no point anymore' whats the point of me working & you know what i couldnt even console him because with the no medical card exemption & income tax increase he is going to be down €200 + a month...we simply wont have enough to cover mortgage & loan & buy groceries....we F*cked..i never slept a wink last night

Do you have children? If so, maybe you are entitled to Family Income Supplement. If you are already in receipt of F.I.S., you should be entitled to more as your take home pay will be less.

susie05

someone has set up a facebook group to try & high-light the usc /med card no exemption..
http://www.facebook.com/pages/Reinstate-Medical-Card-Exemptions/150871834960139

c montgomery

_michelle_ wrote: »

If it is brought in that medical card holders are liable for it I think it is appaling! Why as per usual are low income earners being targeted?? :mad:

Because high income earners can no longer afford to pay for all of your services, childrens allowance, rent allowance, etc.... that low income earners contribute nothing or very little towards!!!

Padkir

cherry4 wrote: »

I have a medical card and am "middle" income. I got it because my medical costs were/would be €350 per month and my income was reduced last year. I work full time my husband has 2 jobs and we still cannot pay our full negative equity mortgage. Today our combined monthly income was reduced by approx €450 per month (if the exemption is not applicable), this when we are already struggling. We may have to give up our long fought for home despite having reduced all spending to a minimum, working 3 jobs etc etc

Looks like we will be emigrating

If anyone has clarity on the medical card exemption PLEASE let us know
Worried
X

First off, I am sorry for your situation and i do feel for you. But, and this is aimed at everyone in a similar situation, why would you have taken out a mortgage of such proportions that working 3 jobs can now no longer pay back? It was the same with an awful lot of people. You're just lucky that you even have those jobs. If you would be unable to pay back a mortgage with 2 decent jobs, then you shouldn't have taken it out.#

Its irresponsibility with money on the part of the people too.

ei.sdraob

Draco wrote: »

It looks like that's a reversal of a pervious PRSI anomly where somone earning €26000.1 would pay €20 more tax than someone on €26000. As far as we* can figure out from the current information, this is all correct.

* I wrote the software behind TaxCalc.ie while my payrole expetert girlfriend provided the tax knowledge)

can you edit your calculator so we can enter tax-credits amount, since some of us done get the same tax credits
company directors loose the prsi/paye credit despite having to pay these for example yes you get penalised for starting a business


edit: thejournal.ie do that

pigeonbutler

I must say I have some sympathy for the people on modest incomes who are suffering sharp falls in take-home pay as a result of the USC. However this is only arising because the health levy was terribly badly designed and the removal of the anomalies it gave rise to on an ongoing basis is causing a number of apparent injustices in the impact of the introduction of the USC.

For example the simplest anomaly of the health levy was that some earning 25.5k that got a pay rise of EUR 1000 ended up with a lower take home pay. On a more micro level, retail staff who took up the offer of a couple of hours overtime ended up with less wages as a result of the levy. That was clearly a ludicrous system and had to be reformed.

Let's make one thing clear though, while looked at in isolation this measure does impose a greater cost on those earning below 26,000 it is an important reform of the tax system that still ensures that people who earn less, pay a far smaller fraction of their wages in taxes. Simple examples here, all single people in PAYE private sector jobs:

Salary % total tax suffered

15,000 2.66%
25,000 14%
35,000 20.2%
50,000 29.7%
100,000 40.87%
300,000 48.3%
1 million 50.9%

One final point, before people say the guy in the last example still takes home 490,000 and that's way too much, blah blah. Remember he's the guy that's a business owner or senior manager that creates possibly hundreds or thousands of other jobs and he's the guy that has the money to either relocate to somewhere that won't take more than half his money or simply shut his business down and go into retirement and not bother creating employment.

Even France, which is about as left-wing a country as we have in Western Europe has a strict rule that nobody's total tax liability can exceed 50% of their income as even they realise that level is the point beyond which any further taxes just penalise economic activity and are counter-productive.

lmaopml

paconnors wrote: »

This is ridicules because of this new social charge my wages are down nearly €30 a week and i'm only on 430 before any deductions **** fianna fail

Yes, unfortunately you used to be exempt from the Health levy if you earned less than 500euro per week in 2010. The Health levy was at a rate of 2%...

Those who earned €500.01 weren't though, so it was kinda unfair in that regard too - it meant they paid an extra 2% per week which worked out at 10euro per week Health Levy or 520euro per annum....for being barely a penny over..

The USC does effect people earning less than 26K per year or €500 per week because it combines the Health levy and Income levy and there are no exceptions for those earning less than 500pw like before. The new system is much clearer and probably more fair imo, however the adjustment to it is more shocking for some, in particular those who would have been at the upper limits of being exempt previously..