Finance Minister Brian Cowen has announced increases in tax credits which he said would take all those on the minimum wage fully outside the tax net. The moves are part of a €682m tax package, more than double last year's total.
The employee tax credit goes up by €230 to €1,270 per year, while personal tax credits rise by €60 for single and €120 for married people to €1,580 and €3,160 a year respectively.
He said that as a result of these increases, over 650,000 of the 1.9 million income earners would be exempt from paying tax.
The standard rate tax band has been widened by €1,400 per year for all taxpayers, having been left unchanged for the past two years. Mr Cowen said this would take 52,100 taxpayers off the higher rate of tax.
The income tax exemption limits for those aged 65 or over are being raised by €1,000 single and €2,000 married to bring them to €16,500 and €33,000 per year respectively. He said the other income tax changes announced today, combined with this, would remove over 66,000 people from the tax net, including 4,700 elderly people.
The tax credit for an incapacitated child is being doubled to €1,000 per year. The blind person's tax credit is being increased to €1,000 single per year. The tax credit for a widowed parent in the first five years after bereavement is being increased by €200 in each year and the widowed person's credit is being increased to €400 per year.
The Minister said the 2% health levy currently applied to those earning over €356 per week. He said this would rise to €400, and would benefit 95,200 people.
