UNIVERSAL SOCIAL CHARGE (USC)

Kotek Besar · 07-12-2010 5:46pm #1

So the USC replaces the Health Levy and Income Levy (which medical card holders were exempt from)..

Will medical card holders be exempt from having to pay the USC?

Leiva · 07-12-2010 5:57pm

Kotek Besar wrote: »

So the USC replaces the Health Levy and Income Levy (which medical card holders were exempt from)..

Will medical card holders be exempt from having to pay the USC?

Here are Rates ...

0% < €4,004
2% €0 to €10,036
4% €10,037 to €16,016
7% > €16,016

Can anyone please do a comparison to what we are paying today ?

BoB_BoT · 07-12-2010 5:57pm

just to keep it neat, on B6 of the summary document, am I to take those numbers as, if I earn more than €16016, I pay 7% on that in the USC tax?

Kotek Besar · 07-12-2010 6:00pm

mixednuts wrote: »

Here are Rates ...

0% < €4,004
2% €0 to €10,036
4% €10,037 to €16,016
7% > €16,016

I see the rates. My question is, are medical card holders subject to USC, being that they were exempt from the income levy?

Leiva · 07-12-2010 6:01pm

BoB_BoT wrote: »

just to keep it neat, on B6 of the summary document, am I to take those numbers as, if I earn more than €16016, I pay 7% on that in the USC tax?

Yep .

But what i would like is is a comparison on what i am paying today .

(eg)
PRSI + INCOME LEVY = 5% TODAY

USC = 7%

_______________________________
= Im down another 2 %

Fishyfreak · 07-12-2010 6:02pm

My last pay slip i paid 8.16% on Income Levy & PRSI.

BoB_BoT · 07-12-2010 6:02pm

no idea, in fact, those numbers don't make sense.
2% €0 to €10,036
yet
0% < €4,004

Leiva · 07-12-2010 6:02pm

Kotek Besar wrote: »

I see the rates. My question is, are medical card holders subject to USC, being that they were exempt from the income levy?

Are Medical card holders exempt from PRSI & Income levy ?:

If not then No .

johnnyskeleton · 07-12-2010 6:03pm

Kotek Besar wrote: »

So the USC replaces the Health Levy and Income Levy (which medical card holders were exempt from)..

Will medical card holders be exempt from having to pay the USC?

Self employed now pay the same rate as the employed, but unlike the employed they get nothing in return (ok, maybe a state pension but most will die of overwork and starvation related disease before then).

dvpower · 07-12-2010 6:04pm

Fishyfreak wrote: »

My last pay slip i paid 8.16% on Income Levy & PRSI.

The new charge is in addition to PRSI
It replaces the levies only

_michelle_ · 07-12-2010 6:05pm

Kotek Besar wrote: »

So the USC replaces the Health Levy and Income Levy (which medical card holders were exempt from)..

Will medical card holders be exempt from having to pay the USC?

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:

BoB_BoT · 07-12-2010 6:06pm

johnnyskeleton wrote: »

Self employed now pay the same rate as the employed, but unlike the employed they get nothing in return (ok, maybe a state pension but most will die of overwork and starvation related disease before then).

exactly, they want us to pay the same and get nothing in return in times of hardship, a farce as usual.

Kotek Besar · 07-12-2010 6:08pm

mixednuts wrote: »

Are Medical card holders exempt from PRSI & Income levy ?:

If not then No .

Medical Card holders are exempt from the Income Levy but pay PRSI.

So, are medical card holders subject to USC or will they be exempt, being that they were exempt from the income levy?

loyatemu · 07-12-2010 6:08pm

current charge is 4% Health levy (5% over 100K) and 2% income levy (4% over 100K)

so if you earn under 100K you'll be paying slightly more (allowing for the banding effect) and if you earn over 100K you'll be paying slightly less than the old levies but this'll be offset by the removal of the PRSI cap.

Leiva · 07-12-2010 6:10pm

dvpower wrote: »

The new charge is in addition to PRSI
It replaces the levies only

Holy **** ..

That means :

existing rates:
PRSI = 8% average
OLD LEVYS = 2%
________________________
10 %

new rates:
PRSI = 8% average
USC = 7%
________________________
15%

+5% :mad:

Am i missing something ?

wicorthered · 07-12-2010 6:12pm

mixednuts wrote: »

Holy **** ..

That means :

existing rates:
PRSI = 8% average
OLD LEVYS = 2%
________________________
10 %

new rates:
PRSI = 8% average
USC = 7%
________________________
15%

+5% :mad:

Am i missing something ?

Helath levy is part of PRSI, so this should reduce I think

Fishyfreak · 07-12-2010 6:13pm

dvpower wrote: »

The new charge is in addition to PRSI
It replaces the levies only

Cheers for that

Ok I paid 6.24% so

TouchingVirus · 07-12-2010 6:14pm

Not quite loyatemu - the annexes to the summary of measures lists the following example which would be close to many people I know:

Single, no children, unmarried earning €25k with a pension contribution of €1500

Old System: Health Levy = €0, Income Levy = €500
New System (USC): €1069

And the tax is increased from €1040 to €1400 to boot.

That's a net decrease of -4.7%, the highest of all categories examined. Even the people on 100k a year are only facing a net deduction of -3.4%

loyatemu · 07-12-2010 6:15pm

old (assuming your on less than 100K)

4% - PRSI
4% - Health
2% - Income
10%

New

4% - PRSI
7% - USC
11%

TouchingVirus · 07-12-2010 6:17pm

I don't pay any PRSI contributions, I also don't pay Health. I'm just under the exemption limit for those.

But now I'm going to be creased with the USC

dvpower · 07-12-2010 6:19pm

wicorthered wrote: »

Helath levy is part of PRSI, so this should reduce I think

PRSI is 4% I think.

So instead of paying PRSI(4%) + Income Levy (2%) + Health Levy (1%), you will pay USC (7%) + PRSI (4%).

That's my reading; I might be mistaken.

Edit: TouchingVirus is closer to the mark

loyatemu · 07-12-2010 6:19pm

TouchingVirus wrote: »

Not quite loyatemu - the annexes to the summary of measures lists the following example which would be close to many people I know:

Single, no children, unmarried earning €25k with a pension contribution of €1500

not disputing this, but why wouldn't a single person on 25K have to pay the health levy - I though it was universal?

[EDIT] - OK its not universal, it only applies above (slightly under) 25K.

youcancallmeal · 07-12-2010 6:33pm

I'm very confused with this. From looking at my payslip it looks like I'm paying 6.94% PRSI, 2.05% income levy and no health leavy. So does that mean I will have to an extra 5% tax not including changes to the tax credits!?

dvpower · 07-12-2010 6:38pm

youcancallme>al wrote: »

I'm very confused with this. From looking at my payslip it looks like I'm paying 6.94% PRSI, 2.05% income levy and no health leavy. So does that mean I will have to an extra 5% tax not including changes to the tax credits!?

My payslip has my health levy included in the PRSI deduction. There is an excemption on part of your earnings.
This explains why it isn't exactly 8% (but also allows everyone here work out how much you get paid):)

Laminations · 07-12-2010 6:43pm

How is this 7% USC progressive when you pay 7% regardless of whether you are on €20,000 or €200,000. It doesn't increase incrementally like the levies did and it cushions the blow for the very well paid.

Look at http://taxcalc.ie/calculator/ and mess around with some figures. The lower paid are bearing the brunt

JamesBond2010 · 07-12-2010 7:03pm

mixednuts wrote: »

Holy **** ..

That means :

existing rates:
PRSI = 8% average
OLD LEVYS = 2%
________________________
10 %

new rates:
PRSI = 8% average
USC = 7%
________________________
15%

+5% :mad:

Am i missing something ?

Laminations wrote: »

How is this 7% USC progressive when you pay 7% regardless of whether you are on €20,000 or €200,000. It doesn't increase incrementally like the levies did and it cushions the blow for the very well paid.

Look at http://taxcalc.ie/calculator/ and mess around with some figures. The lower paid are bearing the brunt

yes you are right. the rich are getting away with murder again

people on the lower end are losing nearly as much as the high end

JamesBond2010 · 07-12-2010 7:09pm

2010 2011 difference

Net 110,317.40 106,452.16 -3,865.24a person on 200,000

Net 18,724.16 17,364.16 -1,360.00a person on 20,000

Padkir · 07-12-2010 7:10pm

JamesBond2010 wrote: »

2010 2011 difference

Net 110,317.40 106,452.16 -3,865.24a person on 200,000

Net 18,724.16 17,364.16 -1,360.00a person on 20,000

They're paying 3 times more tax on your example...?? What more do you want????

JamesBond2010 · 07-12-2010 7:14pm

there is a big difference between 200,000 and 20,000. i just was just showing this example

ParkRunner · 07-12-2010 7:22pm

I'm pretty sure it's 1% up from income levy + health levy = 6% to 7% universal charge

JamesBond2010 · 07-12-2010 7:25pm

susie05 wrote: »

S0 can anyone answer this for definate yet..will med card holders have to pay the usc?

the Ans is no , No one can give a def ans

Stheno · 07-12-2010 8:45pm

loyatemu wrote: »

old (assuming your on less than 100K)

4% - PRSI
4% - Health
2% - Income
10%

New

4% - PRSI
7% - USC
11%

in 2010 you went up to 4% Income levy after approx. 75k then 6% after 150k

Also they've abolished the PRSI ceiling after 75k

cherryghost · 07-12-2010 9:03pm

I'm doing some calculations as a self-employed worker just for interests sake.

Am I right in seeing that for lower bracket earners could pay up to QUADRUPLE the tax rates than an employee earning the same income??

The USC isn't affected in anything, right? I mean it's the same for self-employed or PAYE

Gus99 · 07-12-2010 9:13pm

JamesBond2010 wrote: »

2010 2011 difference

Net 110,317.40 106,452.16 -3,865.24a person on 200,000

Net 18,724.16 17,364.16 -1,360.00a person on 20,000

Padkir wrote: »

They're paying 3 times more tax on your example...?? What more do you want????

The increase is 3 times more. In fact, the person on 200k is paying 35 times more tax (93,548 vs 2,636) based on the figures provided. Or put another way, they are paying 46.7% of their income in tax, whereas the person on 20k is paying 13.2%.

But that doesn't fit with the usual hyperbole that the lower earners always bear the brunt, the most vulnerable are being attacked again, etc etc

dvpower · 07-12-2010 9:15pm

susie05 wrote: »

S0 can anyone answer this for definate yet..will med card holders have to pay the usc?

I had a look at some of the supplementary information on the Dept of Finance website earlier and I couldn't figure out if medical card holders have to pay it.
They said something about it being levied on the 'same basis' as the levies its replacing, but they weren't specific.

Ogham · 07-12-2010 9:16pm

susie05 wrote: »

S0 can anyone answer this for definate yet..will med card holders have to pay the usc?

Anyone earning over €4004 will pay this USC. So - some people on medical cards will be exempt - but only because of earnings not because thay have a medical card. A med card will not give you examption from the USC

See http://www.moneyguideireland.com/universal-social-charge.html

dvpower · 07-12-2010 9:19pm

Gus99 wrote: »

But that doesn't fit with the usual hyperbole that the lower earners always bear the brunt, the most vulnerable are being attacked again, etc etc

One of the shocking statistics I heard today was that prior to this budget, 45% of workers pay no income tax at all and only something like 13% pay tax at the higher rate. There's something very wrong about that.

Eoineo · 07-12-2010 9:22pm

Ogham wrote: »

Anyone earning over €4004 will pay this USC. So - some people on medical cards will be exempt - but only because of earnings not because thay have a medical card. A med card will not give you examption from the USC

See http://www.moneyguideireland.com/universal-social-charge.html

Are you sure about that? If so it is a much larger income decrease for many families than the government have let on....

Blowfish · 07-12-2010 9:22pm

Laminations wrote: »

Look at http://taxcalc.ie/calculator/ and mess around with some figures. The lower paid are bearing the brunt

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.

DubDani · 07-12-2010 9:26pm

According to the Deloitte Calculator and Taxcalc on an Income of 50K the USC will be slightly lower then the Levies you paid this year on the same salary.

Padkir · 07-12-2010 9:27pm

Gus99 wrote: »

The increase is 3 times more. In fact, the person on 200k is paying 35 times more tax (93,548 vs 2,636) based on the figures provided. Or put another way, they are paying 46.7% of their income in tax, whereas the person on 20k is paying 13.2%.

But that doesn't fit with the usual hyperbole that the lower earners always bear the brunt, the most vulnerable are being attacked again, etc etc

Yup sorry thats what I meant, and I completely agree with you!

dvpower · 07-12-2010 9:27pm

This from Finance:

Finance.gov.ie wrote:

Rate of the Charge
The USC will be applied at the following rates:
0% < €4,004
2% €0 - €10,036
4% €10,036 - €16,016
7% > €16,016
The lower exemption threshold of €4,004 means that annual income below this amount will not be chargeable to the USC, but once this amount is exceeded then the USC will be applied on the entire income. This method is similar to the mechanism currently used for the Income Levy and
the Health Levy.

Base of the Charge
The USC will apply on a similar base to the Income Levy with no special exemptions.
However, a lower rate will be applied to income earners over 70. There will also be an exemption from the charge for ‘genuine’ capital allowances used in business. Pension contributions will not have an exemption from the USC

dvpower · 07-12-2010 9:38pm

DubDani wrote: »

According to the Deloitte Calculator and Taxcalc on an Income of 50K the USC will be slightly lower then the Levies you paid this year on the same salary.

That doesn't make sense. The rate is higher by 1% and the exemptions are lower.

wicorthered · 07-12-2010 9:39pm

People on 25K a year appear to be getting shafted! Previously exempt from from health levy so taking a big hit. The will lose 4.3% of their income yet 100,000 grand only gonna lose 3.7. 35K only lose .5% doesn't seem fair to me

DubDani · 07-12-2010 9:45pm

dvpower wrote: »

That doesn't make sense. The rate is higher by 1% and the exemptions are lower.

USC is staged (i.e. some on 2% and some on 4%), whereby Income and Health Levy was payable on th full 50K. Following example on 50K:

Income Levy 2% = 1000
Health Levy 4% = 2000

USC 2% = 200.72
4% = 239.20
7% = 2378.88

3000 (2010) vs. 2818 (2011)

susie05 · 07-12-2010 9:48pm

im actually gutted by the fact that medical card holders are not exempt..we are down €45 a week now from the usc alone now,never mind the income tax hike:( (i think)
i dont work & husbands gross is around €680 so around 7% of that is around €45 - €50 weekly

gurramok · 07-12-2010 9:56pm

If you contribute to a pension at work, you lose alot. Contributions are subject to PRSI and USC. Well, I have lost alot according to taxcalc.eu :mad:

shaddupayaface · 07-12-2010 10:13pm

Ogham wrote: »

Anyone earning over €4004 will pay this USC. So - some people on medical cards will be exempt - but only because of earnings not because thay have a medical card. A med card will not give you examption from the USC

See http://www.moneyguideireland.com/universal-social-charge.html

The link above states that there is no mention whether MC holders are or are not exempt from the USC.

To me, this means that there is no definate answer out there.....yet!

wicorthered · 07-12-2010 10:17pm

Don't see why medical card holders should be exempt, why should I have to pay this and doctors fees when others don't pay either:eek:

Eoineo · 07-12-2010 10:30pm

wicorthered wrote: »

Don't see why medical card holders should be exempt, why should I have to pay this and doctors fees when others don't pay either:eek:

Medical card holders receive the card due to their financial circumstances and/or medical need. The limits are very low income wise in order to qualify. If you have a medical card it is because without it you would be unable to pay to see the Doctor, medical treatment or prescription fees.

hexx · 07-12-2010 10:33pm

I think this is quite definitive from the Annexes of Budget 2011

Base of the Charge
The USC will apply on a similar base to the Income Levy with no special exemptions.

UNIVERSAL SOCIAL CHARGE (USC)

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