So you have checked on the Budget Calculator how you are affected by Budget 2011 – see below how some other people are affected by the changes.
Single person Earning €30,0000 – Better Off!
Jenny earns €30,000 a year and lives with her parents
With the changes in tax credits, Jenny’s income tax bill will increase by €360.
But the new Universal Social Charge, which replaces the Income Levy and Health Levy, is Jenny’s saving grace – this saves her €380.
So overall, Jenny will be €20 Better off over the year from the Budget Changes.
Single person Earning €20,0000 – A black day
Jack earns €20,000 a year, rents from a Private Landlord and is a member of SIPTU
Rent Relief is being phased out over 8 years and we have estimated this will cost Jack €50 this year. He will also no longer receive €70 of tax credits for his trade union Membership
With the other changes in tax credits, Jack moves from a situation where he paid no income tax in 2010 to having an income tax bill of €350 in 2011.
The new Universal Social Charge is also an expensive charge for Jack – this will cost him €319 a year more than the old Income & Health Levies..
So overall, Jack will be €670 Worse off over the year from the Budget Changes.
Married Couple, one income with 2 Kids – Not looking good
Pippa & Mark are married with 2 kids and have one income of €40,000.
The Child Benefit rates for 2 kids will cost them €20 a month.
The changes in Tax Bands will see Pippa now paying tax at the higher rate of 41% on all income over €41,800 in 2011, whereas in 2010 the higher rate only kicked in on her income over €45,400.
This allied with the reduction in Home Carer tax Credits from €900 to €810 and the 10% in personal and PAYE tax credits will cost Pippa and Mark €1,486 more in Income Tax. Ouch!
The Universal Social Charge will be €181 less than the old Income and Health Levies.
Overall, Pippa & Mark will be worse off by €1,295 in 2011 from the Budget
High Earners take a hit too
James earns €100,000 a year and contributes €10,000 to a pension plan from his salary.
While no changes were made to the amount of income tax relief James receives on his pension in 2011, James will now have to pay PRSI on his pension contributions and on his income above €75k. This will cost James €955 in PRSI.
The income tax changes will cost James €1,296, mainly because he will now pay more tax at the higher rate of 41%.
Topping that off, the Universal Social Charge will cost James €70 more than the old Income and Health Levies.
One saving for James is the reduction in the travel tax on flying from €10 to just €3, which will save him €35 a year on his normal 5 flights a year
Overall, James is worse off my €2,100 in 2011 from the budget
Both Parents Working
Sandra & Tom are married with 3 kids and both earn €40,000. They both contribute 5% of their salaries into pensions and are union members.
The Child Benefit rates for 3 kids will cost them €40 a month. The rate for the first 2 children drop by €10 each, while the Child Benefit for the 3rd child is cut €20. A bit harsh on the youngest I think you’ll agree.
PRSI on the pensions will cost them €160 over the year, But the Universal Social Charge saves then €402.
Their Income tax bill shoots up though from €8,412 to €10,784, a cost of €2,372
Overall, Sandra & Tom will be worse off by €2,484 in 2011 from the Budget
Pensioners hit
James is married to Mary and receives a state pension of roughly €20,000 and €16,000 from a private pension.
Previously they were exempt from income tax as their total earnings were less than the €40,000 exemption limit that applied in 2010. This exemption limit has been decreased to €35,000.
With the cut in personal tax credits and the reduction in the Age Tax credits for married people from €650 to €490, James will have to pay €1,760 in tax in 2011 compared to €0 (zero) in 2010.