UNIVERSAL SOCIAL CHARGE (USC)

cherry4

Padkir wrote: »

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.

Thanks for your sanctimonious reply I could afford my mortgage when we took it out but due to rubbish infrastructure and rising costs the job I originally had relocated to eastern Europe the job I am in now does not pay as much therefore my husband took a second job
Please consider your ignorance before you reply how could we have got a mortgage in 2004 without the correct income requirements the issue is things have changed since then IDIOT

Padkir

cherry4 wrote: »

Thanks for your sanctimonious reply I could afford my mortgage when we took it out but due to rubbish infrastructure and rising costs the job I originally had relocated to eastern Europe the job I am in now does not pay as much therefore my husband took a second job
Please consider your ignorance before you reply how could we have got a mortgage in 2004 without the correct income requirements the issue is things have changed since then IDIOT

You could meet the requirements for getting that size of a mortgage yes, but, I assume it could be anywhere from between 10-30 years we're talking, a bit of forward thinking is needed when deciding to put yourself so heavily in debt. I for one would not take out that large of a mortgage unless I could afford to pay it back if I took maybe a 30% pay cut.
It's hard for people I know, but unless you're very, very well educated/qualified, it's not unreasonable to think that somewhere along the line your wages may have to drop significantly.

cherry4

Padkir wrote: »

You could meet the requirements for getting that size of a mortgage yes, but, I assume it could be anywhere from between 10-30 years we're talking, a bit of forward thinking is needed when deciding to put yourself so heavily in debt. I for one would not take out that large of a mortgage unless I could afford to pay it back if I took maybe a 30% pay cut.
It's hard for people I know, but unless you're very, very well educated/qualified, it's not unreasonable to think that somewhere along the line your wages may have to drop significantly.

If you consider educated to Masters Level not sufficient then perhaps you are correct but perhaps having an uneducated buffoon in charge of Finance during the boom I.e Mc Creavy is more to blame

My family and I will be emigrating in the next 2 years taking our 2 irish masters education to another economy

Padkir

cherry4 wrote: »

If you consider educated to Masters Level not sufficient then perhaps you are correct but perhaps having an uneducated buffoon in charge of Finance during the boom I.e Mc Creavy is more to blame

My family and I will be emigrating in the next 2 years taking our 2 irish masters education to another economy

So education wasn't the problem, fair enough. I'm just guessing here but feel free to correct me if im wrong, but the way I see it is that you have taken out a mortgage which didn't leave much scope for any reductions to your wages. As I said before, a mortgage is over a very long time and it's inevitable that at some stage along it, your salary will be reduced. You just need to have been expecting it.
I'm not trying to start an argument here, I'm just making the point that it wasn't just the poor governing that led to many mortgage holders being unable to pay.
I just read on another thread of someone who is on €33800 gross a year, which he worked out after tax to be in the region of €530 a week, or €2500 a month, roughly. And he is paying €1900 a month on a mortgage. Unless his current pay has been halved since he got the mortgage, then that was an insane amount to commit yourself to paying back, and I just hope people wont make the same mistakes in the future.

woody1

i think i get the point that padkir is trying to make in relation to people overstretching themselves in relation to the size of mortgage that they got relative to what they earned,
but myself and my better half got our mortgage 5 years ago based on 2 good wages , again both of us are college educated, one degree and one masters, the repayment wouldve been at the time about a quarter or less of what was coming in , so room for manouver you would think,
however i am now on less than a third of what i was on previously ( at one stage i was on less than that )
because of other cuts during the year 2010 i am down another 7000 ( ran out of jb and creche fees doubled )
and from the current and previous budgets like everyone weve gotten hammered, and with this universal social charge it looks like the government are gonna take 2600 a year off us approx 200 a month plus the extra tax gonna work out over 300 a month now hindsight is a great thing but i dont think any one of us couldve foreseen those types of cuts in earnings or tax hikes when we were sitting down to sign our mortgage.... at the time i was working in the construction industry and i was aware that the party had to end sometime..but i dont think anyone couldve foreseen the complete halt that it has come to..
AGAIN i dont think anyone on a low to middle income couldve foreseen that a budget would end up taking over 3 grand a year more off them than the previous year... personally i think this is gonna push a lot of people that were just about making ends meet over the edge..
sorry for long reply and sorry for repeating meself and talking round in circles a bit but i think the point has to be made that not everyone was or is just irresponsible with money ,

Padkir

woody1 wrote: »

i think i get the point that padkir is trying to make in relation to people overstretching themselves in relation to the size of mortgage that they got relative to what they earned,
but myself and my better half got our mortgage 5 years ago based on 2 good wages , again both of us are college educated, one degree and one masters, the repayment wouldve been at the time about a quarter or less of what was coming in , so room for manouver you would think,
however i am now on less than a third of what i was on previously ( at one stage i was on less than that )
because of other cuts during the year 2010 i am down another 7000 ( ran out of jb and creche fees doubled )
and from the current and previous budgets like everyone weve gotten hammered, and with this universal social charge it looks like the government are gonna take 2600 a year off us approx 200 a month plus the extra tax gonna work out over 300 a month now hindsight is a great thing but i dont think any one of us couldve foreseen those types of cuts in earnings or tax hikes when we were sitting down to sign our mortgage.... at the time i was working in the construction industry and i was aware that the party had to end sometime..but i dont think anyone couldve foreseen the complete halt that it has come to..
AGAIN i dont think anyone on a low to middle income couldve foreseen that a budget would end up taking over 3 grand a year more off them than the previous year... personally i think this is gonna push a lot of people that were just about making ends meet over the edge..
sorry for long reply and sorry for repeating meself and talking round in circles a bit but i think the point has to be made that not everyone was or is just irresponsible with money ,

That's fair enough, I take your point. When you put it out in writing like that just how much is being taken off by each cut it is difficult to think that you could have expected it! That said, there are some who borrowed recklessly!:o

pigeonbutler

woody1 wrote: »

i think i get the point that padkir is trying to make in relation to people overstretching themselves in relation to the size of mortgage that they got relative to what they earned,
but myself and my better half got our mortgage 5 years ago based on 2 good wages , again both of us are college educated, one degree and one masters, the repayment wouldve been at the time about a quarter or less of what was coming in , so room for manouver you would think,
however i am now on less than a third of what i was on previously ( at one stage i was on less than that )
because of other cuts during the year 2010 i am down another 7000 ( ran out of jb and creche fees doubled )
and from the current and previous budgets like everyone weve gotten hammered, and with this universal social charge it looks like the government are gonna take 2600 a year off us approx 200 a month plus the extra tax gonna work out over 300 a month now hindsight is a great thing but i dont think any one of us couldve foreseen those types of cuts in earnings or tax hikes when we were sitting down to sign our mortgage.... at the time i was working in the construction industry and i was aware that the party had to end sometime..but i dont think anyone couldve foreseen the complete halt that it has come to..
AGAIN i dont think anyone on a low to middle income couldve foreseen that a budget would end up taking over 3 grand a year more off them than the previous year... personally i think this is gonna push a lot of people that were just about making ends meet over the edge..
sorry for long reply and sorry for repeating meself and talking round in circles a bit but i think the point has to be made that not everyone was or is just irresponsible with money ,

I sympathise with that situation. However... what else is the government to do? We spent 49 Billion in 2010 while raising only 31 billion in taxes. The markets have pretty much closed to us for further borrowing at affordable rates. So what do we do?

a) raise taxes a huge amount on everybody
b) cut social welfare to almost nothing for everybody
c) fire most of our public sector
d) do a a small amount of all 3 options

Yes, feel free to be angry at the government for getting us to be here; but now that we are here, what do we do?

Gael23

Is there an exemption for people over 70?

Razor60

lets do a few weekly calculations comparing 2010 and 2011.

The new USC will be calculated on a weekly basis.

Those that earn 78 euro or more will pay the charge.

2010 2011
Gross 200 200
Cutoff 700 700
Credit 70 70
Tax 0 0
PRSI 0 0
Levy 0 n/a
USC 0 4.14
Nett Pay 200 195.86


2010 2011
Gross 300 300
Cutoff 700 700
Credit 70 70
Tax 0 0
PRSI 0 0
Levy 6.00 n/a
USC 0 8.14
Nett Pay 294 292.86


2010 2011
Gross 400 400
Cutoff 700 700
Credit 70 70
Tax 10 10
PRSI 16 16
Levy 8 n/a
USC 0 14.90
Nett Pay 366 359.10



2010 2011
Gross 500 500
Cutoff 700 700
Credit 70 70
Tax 30 30
PRSI 20 20
Levy 10 n/a
USC 0 21.90
Nett Pay 440 428.10



2010 2011
Gross 600 600
Cutoff 700 700
Credit 70 70
Tax 50 50
PRSI 42.92 24.00
Levy 12.00 n/a
USC 0 28.90
Nett Pay 495.08 497.10

campbellu

The USC has bigger impact on those under 24/25k as outlined by other posters. I took the IERS (public service early retirement)(31 yrs service) last year after very serious calculations about what I could live on. The income levy was then introduced for those earning over 24k on all of the income-that was me-just under 25K. This was €9 a week, now the new charge will be deducted too. I am also to accept a 4% pay/pension decrease-so I must qualify as one of the highest hit. My partner is on an invalidity pension this last 14 years.

I am lucky? my kids are educated and only one still at home (unemployed primary school teacher)-other son is (unemployed Quantity surveyor-with large mortgage and a 7yr old)..my hope is that we can all survive the next few years and support each other.

But I don't see fairness in the measures introduced.

woody1

quote "I sympathise with that situation. However... what else is the government to do? We spent 49 Billion in 2010 while raising only 31 billion in taxes. The markets have pretty much closed to us for further borrowing at affordable rates. So what do we do?

a) raise taxes a huge amount on everybody
b) cut social welfare to almost nothing for everybody
c) fire most of our public sector
d) do a a small amount of all 3 options

Yes, feel free to be angry at the government for getting us to be here; but now that we are here, what do we do? "

i would totally agree with point D mate. but seeing as some families with medical cards are going to be down up to 10% of their weekly income because of this particular measure i fail to see it as a small amount of anything..it is in fact a very significant tax on a group of people without the means to pay it

im not an economist so i wouldnt be big on ideas for alternatives , i thought the 15 grand cut the ministers took was paltry in the overall scheme of things, i was hoping for the senior civil servants to all be cut back to a single point 150k or something but seeing as their the ones that write the budget that was probably a bit much to expect...

to be honest whilst i dont agree with the usc being applied to medical card holders if it was even applied at a reduced rate say 4% instead of 7% itd be slightly easier to take

Charisteas

lmaopml wrote: »

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.

Actually i beleive that the Health Levy (sometimes called Health Contribution) was set at 4% on all earnings above €26000 up to €75,036, and 5% on earnings over €75,036. So if you were earning €500.01 per week, you would have been paying €20 a week for this.

The income levy is at 2%.

P.R.S.I is at 0% for the first €127 per week, and then 4% on anything more than €127.

But on a lot of peoples payslips, the Health Levy and PRSI are calculated together as one lump deduction, and just listed as PRSI.

Gael23

This may have been asked already ,Havent read all the thread:
Take an elderly married couple on a small private pension supplemented by the state pension. Do they pay the USC on their total income or only income from their employment pension?

pigeonbutler

ryanf1 wrote: »

This may have been asked already ,Havent read all the thread:
Take an elderly married couple on a small private pension supplemented by the state pension. Do they pay the USC on their total income or only income from their employment pension?

State pension is exempt. So only private pension is subject to the charge.

USC is applied at a max rate of 4% for over over-70's.

AlekSmart

The problem with the medical card system is that it creates a huge barrier to work or to make more via overtime if in a low paid position.

The problem for dowlingm and many other posters who beaver away under a foreign flag,is the somewhat skewed national perception of "work".

Ireland,currently operates the EU derived "Working Time Dirtective at it`s most restrictive level,with average working time limits of 48hours over 17 weeks and various other restrictions as to rest periods and availability.

There is little hope of this country working it`s way out of depression unless the Government moves to suspend various elements of this nonsensical restrictive law.

You`ll not find many Chinese worrying about a €1,500 fine for working over their hours......:o

WowieZowie

I worked in Ireland for last 3 years. Hard, physical work for average 290e/week. I live in Dublin.
I escaped from Poland becouse mad taxation and very high, forced social security (which gives you back almost nothing), which makes work of most people non-profitable.
On my first payslip this year I've realized USC, checked what is that, and become realy sad, becouse I see now the same mistakes in Irish politics which I saw in Poland. Higher taxation = less money on market = less investments = less jobs = worse everywhere (maybe not in bank sector, which we pay down alltogether).
Conclusion: Many friends told me: "If you don't have 39 hours/week, as you suppose to have (contract), go to Social Welfare, they will refund you something." I was says "No! I'm not in Ireland to ask social welfare for anything but to take proper money for proper work". Now... it has no point anymore. Irish government start to steal my money like polish one. New taxes, mad prices for petrol (when I came here was 1euro/liter...), less jobs.
Wake up Irish people! You had great, free (political and economical) country, "european tiger" as european media called you for many years. Now, you getting to loose all of that.
Euro currency > Lisbon treaty > Higher and higher taxes = masses of people entirely dependent on social welfare.
God bless you!... and me. I think I have to look for another country to settle again. Is there still any normal country in the this crazy, socialistic world? :mad:
PS. Sorry for my english, I'm not native speaker.

horse7

as i understand it usc is not levied on the state pension.however my brother has been working with the dept of p and t ,now called eircom for 35 years and as such is not entitled to the state pension,but to the eircom pension.is he liable to pay usc on his sole eircom pension.

Ogham

horse7 - yes the uSc will be payable. Eircom will probably deduct it.
Some figures on USC levels Here.

PS - why would he not get state pension too ?- he must have paid plenty of PRSI over the years - he should get both

Kristopherus

Ogham wrote: »

horse7 - yes the uSc will be payable. Eircom will probably deduct it.
Some figures on USC levels Here.

PS - why would he not get state pension too ?- he must have paid plenty of PRSI over the years - he should get both

+1 He should qualify for Contributory OAP when he reaches 65 (or is it 66) if he has 35 yrs service. The vast majority of P&T workers paid PRSI at the "A" rate.

kippy

WowieZowie wrote: »

I worked in Ireland for last 3 years. Hard, physical work for average 290e/week. I live in Dublin.
I escaped from Poland becouse mad taxation and very high, forced social security (which gives you back almost nothing), which makes work of most people non-profitable.
On my first payslip this year I've realized USC, checked what is that, and become realy sad, becouse I see now the same mistakes in Irish politics which I saw in Poland. Higher taxation = less money on market = less investments = less jobs = worse everywhere (maybe not in bank sector, which we pay down alltogether).
Conclusion: Many friends told me: "If you don't have 39 hours/week, as you suppose to have (contract), go to Social Welfare, they will refund you something." I was says "No! I'm not in Ireland to ask social welfare for anything but to take proper money for proper work". Now... it has no point anymore. Irish government start to steal my money like polish one. New taxes, mad prices for petrol (when I came here was 1euro/liter...), less jobs.
Wake up Irish people! You had great, free (political and economical) country, "european tiger" as european media called you for many years. Now, you getting to loose all of that.
Euro currency > Lisbon treaty > Higher and higher taxes = masses of people entirely dependent on social welfare.
God bless you!... and me. I think I have to look for another country to settle again. Is there still any normal country in the this crazy, socialistic world? :mad:
PS. Sorry for my english, I'm not native speaker.

Fair enough lad, but that "Tiger" was based on ridiculously cheap money, spent via a housing bubble in what has turned out to be a completely unsustainable manner.
While I dont agree with what is happening at the minute (personally my income has taken a massive hit due to this USC and indeed the changes in tax relief on pension contributions, the third and most serious so far hit in three consecutive Januarys, with at least 3 more to go), I do see why changes have to happen - again not agreeing with things as they are, but things have to change.
We all realise what less net pay to the worker means, its not a good knock on effect but if we as a country managed our affairs only SLIGHTLY better, we may not have ended in this position.

Just on topic again, I wasnt messing when I said my take home has gone down significently mainly, I must say due to the pensions changes.
I am down roughly 240 a month net, wife is similiar. Messy. Yeah it could be worse but that is a massive change to income levels with 2 more at least to come.

horse7

Ogham wrote: »

horse7 - yes the uSc will be payable. Eircom will probably deduct it.
Some figures on USC levels Here.

PS - why would he not get state pension too ?- he must have paid plenty of PRSI over the years - he should get both

he is not entitled to state pension,the prsi is class d.(which is civil service prsi). and the company is a private company.

Kristopherus

In that case, then, he will pay usc on his Eircom pension. As will everyone who is on an occcupational pension. Except those on very small occo pensions.Seems crazy to me that someone on €12000 occu pension must pay usc and the contributory pensioner on €12248 pays zilch.

horse7

Kristopherus wrote: »

+1 He should qualify for Contributory OAP when he reaches 65 (or is it 66) if he has 35 yrs service. The vast majority of P&T workers paid PRSI at the "A" rate.

not correct,the vast p and t paid class d. unestablished staff paid class a,but to become established had to change to class d. so he is working in a private firm,and paying a civil service stamp. he has no entitlement to a state pension.,and his sole pension will have usc tax on it.also there is a threshold of 18000euros before tax is applied on a pension,but this usc will apply on the brothers pension after 4000euros.

irishpancake

horse7 wrote: »

not correct,the vast p and t paid class d. unestablished staff paid class a,but to become established had to change to class d. so he is working in a private firm,and paying a civil service stamp. he has no entitlement to a state pension.,and his sole pension will have usc tax on it.also there is a threshold of 18000euros before tax is applied on a pension,but this usc will apply on the brothers pension after 4000euros.

Agree here with horse.

Also ex-P&T myself, 39 yrs service, retired early due to ill-health, no entitlement to State Pension due to PRSI contributions being at Class D.

I am now paying the USC on a small Occupational Pension, even though I qualified for the MC due to my medical condition, and was exempt from Income and Health levies previously.

As the people on State Benefits and Pensions are not affected by this currently, the outcry has been muted, to say the least.

Only a relatively small cohort of voters have been affected this year, but this may change in the coming years, and those currently unaffected should be aware that this charge is coming down the line.

There is a Facebook Campaign on this:

http://www.facebook.com/pages/Reinstate-Medical-Card-Exemptions/150871834960139

bcmf

In the deal done with Labour/FG to get the Finance Bill through has medical card holders become exempt from paying USC?

Ogham

bcmf wrote: »

In the deal done with Labour/FG to get the Finance Bill through has medical card holders become exempt from paying USC?

The changes are not to make them exempt - just to cap it at 4% instead of 7%.
They will be voting on it today

See http://www.moneyguideireland.com/lower-rate-of-usc-for-medical-card-holders.html

Cyril Squirrel

When does this capped rate come into effect?

pigeonbutler

Cyril Squirrel wrote: »

When does this capped rate come into effect?

From reading the bill the capped rate is in effect for the full year. Therefore it should kick in immediately (or as soon as systems can be updated).

In addition, you are entitled to a refund of any excess 7% deductions that may have been suffered. I'm not sure yet if that will be done by way of an immediate refund in the next payment (assuming you suffer tax at source) or will need to be reclaimed from Revenue after the end of the year.

668Janet

Hi,
Can anyone tell me when the new max 4% USC for medical Card holders should kick in? I tend to have to chase my payroll section as they know very little about it all and don’t try to learn any!! If I don’t push they won’t change. paid the income and health levies till last year until I researched it myself and realised I should have been on A2 instead of A1!! Don’t want another week to go by paying more USC than absolutely needed!!
Cheers

Sephiroth_dude

Is the usc replacing prsi too?