Fianna Fáil Finance Spokesperson Michael McGrath has said that instead of lashing out at those who are highlighting the issue, the Minister for Finance Michael Noonan could today allay the fears of low and middle income families with medical cards by ruling out any hike in the Universal Social Charge (USC).
Deputy McGrath was speaking following today’s reporting in the media of a response he received from Minister Noonan to a Dáil question on the issue.
Deputy McGrath said, “The Finance Act 2011 provided that medical card holders with income of not greater than €60,000 per annum would pay the USC at a maximum rate of 4% until 31 December 2014. For this concession to continue, it would need to be included in Budget 2015. The estimated full year cost of the concession for medical card holders is €102m.
“At the same time, the higher 10% rate of USC for self-employed persons earning over €100,000 is similarly due to expire at 31 December 2014 and would need to be provided for in Budget 2015 to avoid a major tax cut for this income group. Retaining the higher USC rate on these persons would save the exchequer €123m per annum.
“Therefore, if the Minister agrees with me that a €123m tax cut for persons earning over €100,000 in Budget 2015 is unjustifiable, he could today rule out any increase in the USC for medical card holders. Those holding medical cards have been disproportionately hit with a raft of flat rate taxes and charges introduced by this Government including the Local Property Tax, prescription charges and the impending water charges.
“A pensioner couple with a single earner on €40,000 a year, and who hold a medical card, stand to lose out by over €700 per annum if the Government does not deal with the issue in the Budget. It is all a question of what priorities this overnment has. The Government has talking up income tax cuts in the next Budget for the past few weeks but now can’t even say that medical card holders will be spared a USC hike in October’s Budget.”