Saturday 18 November 2017

Struggling taxpayers to swamp advisers on debts

Aideen Sheehan

Aideen Sheehan

THE Government money advice agency is expecting a surge in appeals from struggling householders hit by Budget tax increases.

The Money Advice and Budgeting Service (MABS) last night urged people struggling with Budget cuts to their incomes to seek help quickly if they can no longer make ends meet.

Workers opening their paypackets this month have been hit with cuts of up to €180 in takehome pay thanks to tax and PRSI hikes and the hefty new Universal Social Charge.

MABS spokesman Michael Culloty said they expected a big increase in the numbers making contact with their service as the Budget cuts bit.

"We are anticipating an increase in the numbers contacting us this year as all the cuts hit people, but we'd like to see it sooner rather than later," Mr Culloty told the Irish Independent.

Priorities

"The message has to be to get help quickly rather than letting things go, and to look at your household budget carefully to work out the priorities," he said.

The new tax regime has been very confusing for employees this month as deductions are classified under new headings, with the health levy which used to be lumped in with PRSI now abolished and replaced with the Universal Social Charge (USC) which also replaces the income levy.

For a married couple with one income of €25,000, the new USC will eat up €1,069 of their annual pay -- €569 more than they were paying under the health and income levies which it replaces.

Tax increases will take another €360 in the year, while their PRSI bill will rise by €250, meaning their net income is down by €1,179 a year, or nearly €100 per month.

For higher-earning families, the USC is actually lower than the health and income levies it replaces, but the tax and PRSI hikes more than outweigh this.

A family earning €35,000 a year would be €379 a year or €32 a month worse off in total. A family on €75,000 will be €2,025 a year or €169 a month worse off.

Irish Independent

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