TSW Commission: Age should not be a factor in determining tax or USC levels

[Brendan Burgess]

6.1 The Commission recommends that age should be removed as a factor for determining the charge to
Income Tax and Universal Social Charge. The necessary changes to each charge should be introduced over time
to minimise negative impacts.

6.2 The Commission recommends that rates of Universal Social Charge should be determined by income level and
not by reference to any other eligibility criteria.

10.4 The Commission recommends that those over State pension age pay Pay Related Social Insurance on all income other than social welfare payments.

10.5 The Commission recommends removing the Pay Related Social Insurance exemption on supplementary pension income (occupational and personal pensions, and public sector pensions).

 

[Brendan Burgess]

What other criteria apply to USC other than age and income?

Don't we pay it on all our income?

 

[NoRegretsCoyote]

Don't we pay it on all our income?

There are exemptions:

You will not pay USC on payments you recieve:

• • from the Department of Social Protection (DSP)
  • Payments that are similar to DSP payments, but paid by another body such as:
    • Blind Welfare Supplementary Allowance
    • Community Employment Scheme
    • Farm Retirement Pensions
    • Fund for Students with Disabilities
    • JobBridge
    • Job Initiative Scheme
    • Mobility Allowance
    • social welfare payments received from another country
    • Vocational Training Opportunities Scheme (VTOS)
    • Youthreach Training Allowance.
• income on which you have already paid Deposit Interest Retention Tax (DIRT)
• early childcare supplement
• some employer benefits, such as travel passes and Cycle to Work Scheme
• income qualifying for childcare services relief
• income qualifying for Rent-a-room Relief
• income from scholarships
• pre-retirement access to Additional Voluntary Contributions (AVCs).

You could make a case maybe for extending it to jobseekers' benefit but for the rest it's hard to see a good reason to tax them.

 

[Purple]

What other criteria apply to USC other than age and income?

Don't we pay it on all our income?

Employees aged 70 or older, and medical card holders are exempt from paying USC at rates 4.5% and 8%. link

From Revenue:

Reduced rates of USC​

Reduced rates of USC will apply if your income is €60,000 or less and:

• you are aged 70 or older
• or
• hold a full Medical Card (not a GP visit card).

If you hold a medical card and your income is €60,000, you need to contact Revenue to receive the reduced rate.

The reduced rates will apply for the whole year when you:

• reach the age of 70 and your income is €60,000 or less
• or
• hold a full medical card at any time during the year.