Cuts announced in Tuesday's Budget to the Universal Social Charge (USC) will cost the Exchequer €335 million and Minister for Finance Michael Noonan says he will push ahead wiht plans to phase out the USC.
Minister Noonan announced that each of the three lowest rates of the Universal Social Charge are to be reduced by half a percent.
The 1% USC rate will be brought down to 0.5%, the 3% rate drops to 2.5%, and the 5.5% rate will fall to 5%.
The measure is designed to improve the take-home pay of low and middle income earners.
Mr Noonan also said he was reducing the band on which the reduced 2.5% of USC would be payable, from €18,668 to €18,772.
The Minister said this was being done to ensure that the salary of a full-time worker on the minimum wage remains outside the top rates of USC.
After the implementation of the new USC measures in Budget 2017, medical card holders and people over 70 years of age who earn below €60,000 will pay a maximum USC rate of 2.5%.
Mr Noonan added the USC will be phased out over time, as resources permit.
Fianna Fáil's spokesperson on finance, Michael McGrath, welcomed the USC measures.
He said Fianna Fáil believes that people should benefit from the economic recovery when they are the ones who are paying the taxes which are going towards public services.
Mr McGrath reiterated his party's stance regarding abolition of the USC - noting that if the economy recovers there would be scope to reduce it over the coming years.
However, Independent TD Stephen Donnelly criticised the cuts.