New USC rate will hit the most vulnerable hardest
The Government will be forced to make the universal service charge, or USC, a good deal more universal when it applies the full 7pc rate to more than 360,000 taxpayers, many of them pensioners. The law establishing the USC mandates that the rate for those on a medical card jumps from 4pc to 7pc from January.
Despite its claim to be 'universal', the controversial USC imposed in the wake of the financial collapse has been a three speed tax – 10pc for self-employed on earnings over €100,000; a rate of 7pc for the majority of workers, and a 4pc rate for those with medical cards whose income does not exceed €60,000.
Imposing the higher 7pc rate on medical card holders will mean hundreds of euro in extra tax for one in five of those who currently hold medical cards, and is expected to raise a further €100m in revenue for the State.