Parliamentary Question addressed to the Minister for Finance

To ask the Minister for Finance if, in view of changes to the rate of universal social charge for the over-70s in Budget 2013, he will provide an update to the example he previously cited in Dáil Éireann (details supplied) which outlined the difference between the gross and net take-home pay of a single public service pensioner over the age of 70 whose gross income is €125,000 after paying the PSPR, universal social charge and all other relevant taxes; and if he will make a statement on the matter.

[Financial Emergency Measures in the Public Interest (Amendment) Bill 2011 Second Stage Tuesday, 29 November 2011 Gross income=€125,000, net income=€71,716]

Reply

Minister for Finance ( Michael Noonan):

The indicative calculations of the amounts of Public Service Pension Reduction (PSPR), Income Tax, and Universal Social Charge (USC) in 2012 and 2013 which apply to a single public service pensioner aged 70 years of age with gross income of €125,000 are set out below.

2012 €“ Single Public Service Pensioner aged 70

Gross Income €125,000

Public Service Pension Reduction (PSPR)

First €12,000 @ 0% = €0
Next €12,000 @ 6% = €720
Next €36,000 @ 9% = €3,240
Next €40,000 @ 12% = €4,800
Balance @ 20% = €5,000 (€13,760)

Universal Social Charge

€10,036 @ 2% = €200.72

€101,204 @ 4% = €4,048.16 (€4,249)

Income Tax

€32,800 @ 20% = €6,560
€78,440 @ 41% = €32,160
€38,720

Less Tax Credits
Personal Tax Credit (€1,650)
PAYE Tax Credit (€1,650)
Age Tax Credit (€245) (€35,175)

Total Deduction (€53,184)

Net Income €71,816

2013 €“ Single Public Service Pensioner aged 70

Gross Income €125,000

Public Service Pension Reduction (PSPR)

First €12,000 @ 0% = €0
Next €12,000 @ 6% = €720
Next €36,000 @ 9% = €3,240
Next €40,000 @ 12% = €4,800
Balance @ 20% = €5,000 (€13,760)

Universal Social Charge

€10,036 @ 2% = €200.72

€5,980 @ 4% = €239.20

€95,224 @ 7% = €6,665.68 (€7,106)

Income Tax

€32,800 @ 20% = €6,560
€78,440 @ 41% = €32,160
€38,720

Less Tax Credits
Personal Tax Credit (€1,650)
PAYE Tax Credit (€1,650)
Age Tax Credit (€245) (€35,175)

Total Deduction (€56,041)

Net Income €68,959