The Budget: What it means to you

The Budget: What it means to you

The Budget: What it means to you

By Matt Britton

Here are examples of how Budget 2010 might affect some of us, courtesy of KPMG:

Maire is single and has a son, aged 10. She works full time as a shop assistant, earning €21,000 per annum. Taking her Family Income Supplement and Child Benefits into consideration, Marie will see a loss of 0.9 per cent or €229 in her annual net income.

2010 2011

Gross Income €21,000 €21,000

Income Tax Liability 0 0

PRSI Liability €576 €576

Health Levy Liability 0 n/a

Income Levy Liability €420 n/a

Universal Social Charge n/a €789

Total Tax Liability €996 €1,365

Net Pay €20,004 €19,635

Total tax liability as a % of gross income; 4.7% 6.5%

Family Income Supplement €3,796 €4,056

Child Benefit €1,800 €1,680

Net Income €25,600 €25,371

Annual Loss -€229

Cathal is single and self employed with an income of €52,000 per annum. He pays a pension contribution of 6 per cent of his gross income. He will see a loss of 3.9 per cent or €1,295 in his annual net income.

2010 2011

Gross Income €52,000 €52,000

Pension Contribution €3,120 €3,120

Income Tax Liability €10,567 €11,503

PRSI Liability €1,560 €2,080

Health Levy Liability €2,080 n/a

Income Levy Liability €1,040 n/a

Universal Social Charge n/a €2,959

Total Tax Liability €15,247 €16,542

Net Pay €33,633 €32,338

Total tax liability as a % of gross income 29.3% 31.8%

Annual Loss; -€1,295

Rachel and Jim are married with two children, aged 8 and 9. Jim works in the home and Rachel is employed as an office manager earning €32,000. The family will see a loss of 0.9 per cent or €301 in their annual net income.

Gross Income €32,000 €32,000

Income Tax Liability €10 €640

PRSI Liability €1,016 €1,016

Health Levy Liability €1,280 n/a

Income Levy Liability €640 n/a

Universal Social Charge n/a €1,559

Total Tax Liability €2,946 €3,215

Net Pay €29,054 €28.785

Total tax liability as a % of gross income 9.2% 10%

Family Income Supplement €1,352 €1,560

Child Benefit €3,600 €3,360

Net Income €34,006 €33,705

Annual Loss -€301

Geraldine and Brian are married with two children, aged 7 and 9. Both Geraldine and Brian joined the Public Service in 1996 and earn €57,000 and €35,000 respectively. The family will see a loss of 4.2 per cent or €2,830 in their annual net income.

Gross Income €92,000 €92,000

Pension Contribution €4,304 €4,304

Pension Related Deduction €5,700 €5,700

Income Tax Liability €11,011 €13,243

PRSI Liability €2,752 €3,152

Health Levy Liability €3,280 n/a

Income Levy Liability €1,840 n/a

Universal Social Charge n/a €5,078

Total Tax Liability €18,883 €21,473

Net Pay €63,113 €60,523

Total Tax Liability as a % of gross income 20.5% €23.3%

Child Benefit €3,600 €3,360

Net Income €63,113 €60,523

Annual Loss -€2,830

Jeanne is 72 and retired, and is in receipt of the contributory State pension of €11,976 per annum. In addition she receives €30,000 per annum from her occupational pension. Jeanne will see a loss of 4.5 per cent or €1,595 in her annual net income.

State Pension €11,976 €11,976

Occupational Pension €30,000 €30,000

Gross Income €41,976 €41,976

Income Tax Liability €5,581 €6,777

PRSI Liability n/a n/a

Income Levy Liability €600 n/a

Health Levy Liability n/a n/a

Universal Social Charge n/a €999

Total Tax Liability €6,181 €7.776

Net Income €35,795 €34,200

Total Tax Liability as a % of gross income 14.7% 18.5%

Annual Loss €1,595

Anne, 66, and Vincent, 69, are retired. They have a contributory State pension of €22,703 and an occupational pension of €17,000 per annum. They will see a loss of 5 per cent or €1,990 in their annual net income.

State Pension €22,703 €22,703

Occupational Pension €17,000 €17,000

Gross Income €39,703 €39,703

Income Tax Liability 0 €1,481

PRSI Liability n/a n/a

Income Levy Liability 0 n/a

Health Levy Liability 0 n/a

Universal Social Charge n/a €509

Total Tax Liability 0 €1.990

Net Income €39,703 €37,713

Total Tax Liability as a % of gross income. 5%

Annual Loss -€1,990

These cases deal with basic personal tax credits, the employee tax credit, the home carer credit, the age credit, the age exemption limits, the standard rate bands, PRSI, Income and Health Levies and the new Universal Social Charge (USC). They also deal with changes to PRSI relief on pension contributions. Social welfare payments under the Family Income Supplement scheme (FIS), the State Pension, and Child Benefit are also included, where relevant. Additional tax reliefs such as Mortgage Interest Relief are not taken into account. Public Service pension contributions are based on Civil Service conditions and the Pension Related Deduction is included for public servants. Some figures are rounded to the nearest euro.