Around 80,000 low income workers will not have to pay the Universal Social Charge under new measures announced in the Budget.
Minister for Finance Michael Noonan said he was increasing the entry point to the charge to just above €12,000.
He also said he was increasing the entry point to the second rate of USC from just over €10,000 to just above €12,000.
The minister added that he is increasing the income tax standard rate band by €1,000 to €33,800 for single people, and reducing the top rate of income tax from 41% to 40%.
The 2% USC will be reduced to 1.5%, and the 4% rate will be cut to 3.5%.
A new 8% USC rate for incomes in excess of €70,000 and an 11% rate of USC for self-employed income in excess of €100,000 were also introduced.
"These changes mean that everyone who currently pays income tax or USC, or both will benefit from today's Budget changes," the minister said.
It means that a part-time worker earning €12,000 will continue to face no income tax and now no USC charge.
A working family with three children where both parents earn €50,000 each will have an additional €100 per month in their pocket.
The minister has promised a reduction in the 52% marginal tax rate on low and middle income earners "over a number of budgets".
Working families have seen the significant falls in both their wages and take-home pay, the minister acknowledged. These impact on competitiveness, are negative for economic growth and act as a barrier to job creation.
As the country enters a new phase, the minister said the Government could now focus on reforming the income tax system in a manner that positively contributes to and strengthens that recovery.