Annex A

Details Of Tax Changes In Budget 2001 And Their Effect On Different Categories Of Taxpayers

(i) Details Of Main Income Tax Changes

(ii) Examples Showing The Effects Of Budget Changes On Different Categories Of Married And Single Taxpayers

Examples 1 to 15 attached show for various categories of taxpayers the income tax, levy and PRSI liabilities payable under the existing and proposed structure.  Changes to Child Benefit from June 2001 and the Family Income Supplement from April 2001 are also included in the calculations.  These figures are rounded to the nearest pound.  The examples are based on specimen incomes with the basic tax-free allowances/exemption limits only.  They do not take account of discretionary reliefs.  Examples showing the net gains to married two earner couples are calculated this year using the assumption that the higher income earner earns 65% of the couples total income and that the lower earning spouse earns 35% of the couples income.  This is based on the Revenue Commissioners estimate of the average income split between two earner couples.  In previous years the examples were based on a 50/50 income split.

(iii) Average Tax Rates

A table showing average tax rates for the years 1997 - 2001 for various household types is included.

(iv) Distribution of Income Earners

A table showing the distribution of taxpayers both pre-Budget and post-Budget.

(v) Illustrative Cases

A number of illustrative cases are included to show the impact of the tax/PRSI and social welfare changes in the Budget on a number different household types.

Change To Calendar Year Tax Year

From January 2002 the tax year will be aligned with the calendar year, therefore necessitating a transitional nine month tax year in 2001, i.e. from April 2001 to December 2001.  Tax credits will apply from April 2001.  These are equivalent to allowances at the standard rate.  An equivalent nine month value for the tax credits is included in tables (i) and (ii).  A 0.74 conversion factor is used to calculate the nine month entitlement and the normal mathematical rounding convention is applied.  In the case of the Euro, the convention is used is to round up to the nearest pound in favour of the taxpayer.  For sake of comparison with previous tax years the data in examples 1 to 15 and the individual are calculated on a 12 month basis for tax, PRSI, Child Benefit and FIS.

Annex A

Details Of Tax Changes In Budget 2001 And Their Effect On Different Categories Of Taxpayers

(i) Details Of Main Income Tax Changes

(ii) Examples Showing The Effects Of Budget Changes On Different Categories Of Married And Single Taxpayers

Examples 1 to 15 attached show for various categories of taxpayers the income tax, levy and PRSI liabilities payable under the existing and proposed structure.  Changes to Child Benefit from June 2001 and the Family Income Supplement from April 2001 are also included in the calculations.  These figures are rounded to the nearest pound.  The examples are based on specimen incomes with the basic tax-free allowances/exemption limits only.  They do not take account of discretionary reliefs.  Examples showing the net gains to married two earner couples are calculated this year using the assumption that the higher income earner earns 65% of the couples total income and that the lower earning spouse earns 35% of the couples income.  This is based on the Revenue Commissioners estimate of the average income split between two earner couples.  In previous years the examples were based on a 50/50 income split.

(iii) Average Tax Rates

A table showing average tax rates for the years 1997 - 2001 for various household types is included.

(iv) Distribution of Income Earners

A table showing the distribution of taxpayers both pre-Budget and post-Budget.

(v) Illustrative Cases

A number of illustrative cases are included to show the impact of the tax/PRSI and social welfare changes in the Budget on a number different household types.

Change To Calendar Year Tax Year

From January 2002 the tax year will be aligned with the calendar year, therefore necessitating a transitional nine month tax year in 2001, i.e. from April 2001 to December 2001.  Tax credits will apply from April 2001.  These are equivalent to allowances at the standard rate.  An equivalent nine month value for the tax credits is included in tables (i) and (ii).  A 0.74 conversion factor is used to calculate the nine month entitlement and the normal mathematical rounding convention is applied.  In the case of the Euro, the convention is used is to round up to the nearest pound in favour of the taxpayer.  For sake of comparison with previous tax years the data in examples 1 to 15 and the individual are calculated on a 12 month basis for tax, PRSI, Child Benefit and FIS.  

(I) DETAILS OF MAIN INCOME TAX CHANGES
In Irish Pounds
     Personal Allowances at Standard Rate EXISTING PROPOSED Allowance Tax Credit Tax Credit
  Allowance Allowance Increase 12 Months (1) 9 Months (2)
Basic Personal Allowances £ £ £ £ £
Single Persons 4,700 5,500 800 1,100 814
Married Couples 9,400 11,000 1,600 2,200 1,628
PAYE 1,000 2,000 1,000 400 296
           
Additional Personal Allowances          
One-Parent Family Allowance / Widowed / Other Parent 4,700 5,500 800 1,100 814
    Tax Rates and Tax Bands EXISTING PROPOSED CHANGE    
Rates          
Standard Rate 22% 20% -2%    
Top Rate 44% 42% -2%    
  EXISTING PROPOSED INCREASE   PROPOSED
  12 Months 12 Months 12 Months   9 Months
Standard Rate Bands £ £ £   £
Single/Widowed Persons 17,000 20,000 3,000   14,800
Married Couples, One Income 28,000 29,000 1,000   21,460
Married Couples, Two Incomes (3) 34,000 40,000 6,000   29,600
One-Parent Families 20,150 23,150 3,000   17,131
     Exemption Limits  (4) EXISTING PROPOSED INCREASE   PROPOSED
  12 Months 12 Months     9 Months
65 and Over £ £ £   £
Single/Widowed 7,500 8,500 1,000   6,290
Married 15,000 17,000 2,000   12,580

Notes
1.  Equivalent value of standard rated allowances as tax credits, i.e. £5,500 @ 20% = ú1,100.
2.  Equivalent value of tax credits for nine months, due to the alignment of the tax year with the calendar year, i.e. 2001 tax year is from April 2001- December 2001.
3.  The tax band of £40,000 available to married couples with two incomes is transferable between spouses up to a maximum of £29,000 for any one spouse.
4.  The Marginal Relief tax rate remains at 40 %.  (It continues to apply until such time as it is more beneficial for the taxpayer to be assessed under the normal taxation system).

(i) DETAILS OF MAIN INCOME TAX CHANGES
  In Euro        
     Personal Allowances - at Standard Rate EXISTING PROPOSED Allowance Tax Credit Tax Credit
  Allowance Allowance Increase 12 Months (1) 9 Months (2)
     Basic Personal Allowances          
      Single Persons 5,968 6,984 1,016 1,397 1,034
      Married Couples 11,936 13,968 2,032 2,794 2,068
      PAYE 1,270 2,540 1,270 508 376
           
     Additional Personal Allowances          
      One-Parent Family Allowance / Widowed / Other Parent 5,968 6,984 1,016 1,397 1,034
           
           
           
     Tax Rates and Tax Bands EXISTING PROPOSED CHANGE    
    Rates          
      Standard Rate 22% 20% -2%    
      Top Rate 44% 42% -2%    
  EXISTING PROPOSED INCREASE   PROPOSED
    Standard Rate Bands 12 Months 12 Months     9 Months
           
      Single/Widowed Persons 21,586 25,395 3,810   18,793
      Married Couples, One Income 35,553 36,823 1,270   27,249
      Married Couples, Two Incomes (3) 43,172 50,790 7,619   37,585
      One-Parent Families 25,586 29,395 3,810   21,752
           
           
           
     Exemption Limits  (4) EXISTING PROPOSED INCREASE   PROPOSED
  12 Months 12 Months     9 Months
      65 and Over          
      Single/Widowed 9,534 10,793 1,270   7,987
      Married 19,047 21,586 2,540   15,974

Notes
1.  Equivalent value of standard rated allowances as tax credits.
2.  Equivalent value of tax credits for nine months, due to the alignment of the tax year with the calendar year, i.e. 2001 tax year is from April 2001- December 2001.
3.  The tax band of €50,790 available to married couples with two incomes is transferable between spouses up to a maximum of €36,823 for any one spouse.
4.  The Marginal Relief tax rate remains at 40 %.  (It continues to apply until such time as it is more beneficial for the taxpayer to be assessed under the normal taxation system).

(ii) Examples Showing the Effects of Budget Changes on Different Categories of Married and Single Taxpayers
                   
EXAMPLE 1
Married couple, one income, no children taxed under PAYE
Full rate PRSI contributor
GROSS   PRSI/Levy Liability   Tax Liability   Total Gain as % of
INCOME   Existing Proposed   Existing Proposed   Gain Net Income
£   £ £   £ £   £ %
9,000   0 0   0 0   0 0.0
10,000   0 0   0 0   0 0.0
11,000   0 0   132 0   132 1.2
12,000   306 272   352 0   386 3.4
13,000   351 312   572 0   611 5.1
14,000   396 352   792 200   636 5.0
15,000   741 692   1,012 400   661 5.0
16,000   806 752   1,232 600   686 4.9
17,000   871 812   1,452 800   711 4.8
18,000   936 872   1,672 1,000   736 4.8
20,000   1,066 992   2,112 1,400   786 4.7
22,000   1,196 1,112   2,552 1,800   836 4.6
24,000   1,326 1,232   2,992 2,200   886 4.5
26,000   1,456 1,352   3,432 2,600   936 4.4
28,000   1,528 1,472   3,872 3,000   928 4.1
30,000   1,586 1,534   4,752 3,620   1,184 5.0
35,000   1,713 1,662   6,952 5,720   1,283 4.9
40,000   1,835 1,782   9,152 7,820   1,385 4.8
45,000   1,953 1,898   11,352 9,920   1,487 4.7
50,000   2,067 2,010   13,552 12,020   1,589 4.6
60,000   2,289 2,230   17,952 16,220   1,791 4.5
70,000   2,503 2,446   22,352 20,420   1,989 4.4
80,000   2,712 2,654   26,752 24,620   2,190 4.3
90,000   2,921 2,862   31,152 28,820   2,391 4.3
100,000   3,130 3,070   35,552 33,020   2,592 4.2
                   
                   
EXAMPLE 2
Married couple, one income, two children taxed under PAYE
Full rate PRSI contributor
GROSS       PRSI/Levy Liability Child Benefit Gain as % of Total Gain where Gain including FIS as
INCOME Existing Proposed Existing Proposed Increase (a) Gain Net Income (b) FIS applies (c) % of Net Income (d)
£ £ £ £ £ £ £ % £ %
9,000 0 0 0 0 500 500 5.0 1,280 10.3
10,000 0 0 0 0 500 500 4.6 1,280 10.0
11,000 0 0 0 0 500 500 4.2 1,280 9.7
12,000 306 272 0 0 500 534 4.2 1,314 9.7
13,000 351 312 0 0 500 539 4.0 1,111 7.9
14,000 396 352 132 0 500 676 4.7 1,196 8.3
15,000 741 692 352 0 500 901 6.1 1,421 9.6
16,000 806 752 572 0 500 1,126 7.2 1,126 7.2
17,000 871 812 792 200 500 1,151 7.1 1,151 7.1
18,000 936 872 1,012 400 500 1,176 6.9 1,176 6.9
20,000 1,066 992 1,452 800 500 1,226 6.7 1,226 6.7
22,000 1,196 1,112 1,892 1,200 500 1,276 6.4 1,276 6.4
24,000 1,326 1,232 2,332 1,600 500 1,326 6.2 1,326 6.2
26,000 1,456 1,352 2,772 2,000 500 1,376 6.1 1,376 6.1
28,000 1,528 1,472 3,212 2,400 500 1,368 5.7 1,368 5.7
30,000 1,586 1,534 4,092 3,020 500 1,624 6.4 1,624 6.4
35,000 1,713 1,662 6,292 5,120 500 1,723 6.2 1,723 6.2
40,000 1,835 1,782 8,492 7,220 500 1,825 6.0 1,825 6.0
45,000 1,953 1,898 10,692 9,320 500 1,927 5.8 1,927 5.8
50,000 2,067 2,010 12,892 11,420 500 2,029 5.6 2,029 5.6
60,000 2,289 2,230 17,292 15,620 500 2,231 5.4 2,231 5.4
70,000 2,503 2,446 21,692 19,820 500 2,429 5.2 2,429 5.2
80,000 2,712 2,654 26,092 24,020 500 2,630 5.0 2,630 5.0
90,000 2,921 2,862 30,492 28,220 500 2,831 4.9 2,831 4.9
100,000 3,130 3,070 34,892 32,420 500 3,032 4.8 3,032 4.8

(a)  Value during 2001 [assuming a 12 month tax year] of the increase in Child Benefit [CB] made in the Budget, which is effective from June, 2001 [i.e. assuming 10 months of CB increase]
(b)  Net income includes CB less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
(c)  The two last columns show the total gain where Family Income Supplement (FIS) is taken up in both years.  The gain includes the value during 2001 [assuming a 12 month tax year] of the
       improvement in FIS made in this Budget which take effect from April, 2001 [i.e. assuming 52 weeks of FIS increase]
(d)  Net income includes CB and FIS [where relevant] less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income

EXAMPLE 3
   Married couple, one income, four children taxed under PAYE
   Full rate PRSI contributor
GROSS       PRSI/Levy Liability Child Benefit Gain as % of Total Gain where Gain including FIS as
INCOME Existing Proposed Existing Proposed Increase (a) Gain Net Income (b) FIS applies (c) % of Net Income (d)
£ £ £ £ £ £ £ % £ %
9,000 0 0 0 0 500 500 5.0 1,280 10.3
10,000 0 0 0 0 500 500 4.6 1,280 10.0
11,000 0 0 0 0 500 500 4.2 1,280 9.7
12,000 306 272 0 0 500 534 4.2 1,314 9.7
13,000 351 312 0 0 500 539 4.0 1,111 7.9
14,000 396 352 132 0 500 676 4.7 1,196 8.3
15,000 741 692 352 0 500 901 6.1 1,421 9.6
16,000 806 752 572 0 500 1,126 7.2 1,126 7.2
17,000 871 812 792 200 500 1,151 7.1 1,151 7.1
18,000 936 872 1,012 400 500 1,176 6.9 1,176 6.9
20,000 1,066 992 1,452 800 500 1,226 6.7 1,226 6.7
22,000 1,196 1,112 1,892 1,200 500 1,276 6.4 1,276 6.4
24,000 1,326 1,232 2,332 1,600 500 1,326 6.2 1,326 6.2
26,000 1,456 1,352 2,772 2,000 500 1,376 6.1 1,376 6.1
28,000 1,528 1,472 3,212 2,400 500 1,368 5.7 1,368 5.7
30,000 1,586 1,534 4,092 3,020 500 1,624 6.4 1,624 6.4
35,000 1,713 1,662 6,292 5,120 500 1,723 6.2 1,723 6.2
40,000 1,835 1,782 8,492 7,220 500 1,825 6.0 1,825 6.0
45,000 1,953 1,898 10,692 9,320 500 1,927 5.8 1,927 5.8
50,000 2,067 2,010 12,892 11,420 500 2,029 5.6 2,029 5.6
60,000 2,289 2,230 17,292 15,620 500 2,231 5.4 2,231 5.4
70,000 2,503 2,446 21,692 19,820 500 2,429 5.2 2,429 5.2
80,000 2,712 2,654 26,092 24,020 500 2,630 5.0 2,630 5.0
90,000 2,921 2,862 30,492 28,220 500 2,831 4.9 2,831 4.9
100,000 3,130 3,070 34,892 32,420 500 3,032 4.8 3,032 4.8
 
(a)  Value during 2001 [assuming a 12 month tax year] of the increase in Child Benefit [CB] made in the Budget, which is effective from June, 2001 [i.e. assuming 10 months of CB increase]
(b)  Net income includes CB less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
(c)  The two last columns show the total gain where Family Income Supplement (FIS) is taken up in both years.  The gain includes the value during 2001 [assuming a 12 month tax year] of the
       improvement in FIS made in this Budget which take effect from April, 2001 [i.e. assuming 52 weeks of FIS increase]
(d)  Net income includes CB and FIS [where relevant] less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
                   
EXAMPLE 4
   Married couple, two incomes, two children taxed under PAYE
   Full rate PRSI contributors
GROSS              PRSI/Levy Liability   Gain as % of Total Gain where Gain including FIS
INCOME Existing Proposed Existing Proposed Increase (a) Gain Net Income (b) FIS applies (c) as % of Net Income (d)
£ £ £ £ £ £ £ % £ %
9,000 0 0 0 0 500 500 5.0 1,280 10.3
10,000 0 0 0 0 500 500 4.6 1,280 10.0
11,000 0 0 0 0 500 500 4.2 1,280 9.7
12,000 0 0 132 0 500 632 4.9 1,360 10.0
13,000 0 0 352 0 500 852 6.3 1,216 8.6
14,000 0 0 572 0 500 1,072 7.5 1,592 11.1
15,000 0 0 792 0 500 1,292 8.5 1,292 8.5
16,000 0 0 1,012 200 500 1,312 8.2 1,312 8.2
17,000 0 0 1,232 400 500 1,332 8.0 1,332 8.0
18,000 0 0 1,452 600 500 1,352 7.7 1,352 7.7
20,000 351 312 1,892 1,000 500 1,431 7.7 1,431 7.7
22,000 410 364 2,332 1,400 500 1,478 7.3 1,478 7.3
24,000 780 728 2,772 1,800 500 1,524 7.1 1,524 7.1
26,000 865 806 3,212 2,200 500 1,571 6.9 1,571 6.9
28,000 949 884 3,652 2,600 500 1,617 6.6 1,617 6.6
30,000 1,034 962 4,092 3,000 500 1,664 6.4 1,664 6.4
35,000 1,562 1,439 5,412 4,000 500 2,035 7.0 2,035 7.0
40,000 1,852 1,704 7,612 5,000 500 3,260 10.4 3,260 10.4
45,000 2,351 2,248 9,812 7,100 500 3,315 9.8 3,315 9.8
50,000 2,553 2,438 12,012 9,200 500 3,427 9.4 3,427 9.4
60,000 2,942 2,810 16,412 13,400 500 3,644 8.8 3,644 8.8
70,000 3,322 3,170 20,812 17,600 500 3,864 8.3 3,864 8.3
80,000 3,639 3,526 25,212 21,800 500 4,025 7.7 4,025 7.7
90,000 3,879 3,768 29,612 26,000 500 4,223 7.4 4,223 7.4
100,000 4,106 4,000 34,012 30,200 500 4,418 7.0 4,418 7.0
This example  assumes that the joint income is divided by 65% and 35% between both spouses.
(a)  Value during 2001 [assuming a 12 month tax year] of the increase in Child Benefit [CB] made in the Budget, which is effective from June, 2001 [i.e. assuming 10 months of CB increase]
(b)  Net income includes CB less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
(c)  The two last columns show the total gain where Family Income Supplement (FIS) is taken up in both years.  The gain includes the value during 2001 [assuming a 12 month tax year] of the improvement in FIS made in this Budget which take effect from April, 2001 [i.e. assuming 52 weeks of FIS increase]
(d)  Net income includes CB and FIS [where relevant] less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
EXAMPLE 5
        Single person taxed under PAYE
        Full rate PRSI contributor
GROSS PRSI/Levy Liability Tax Liability Total Gain as % of
INCOME Existing Proposed Existing Proposed Gain Net Income
£ £ £ £ £ £ %
9,000 0 0 726 300 426 5.1
10,000 0 0 946 500 446 4.9
11,000 0 0 1,166 700 466 4.7
12,000 306 272 1,386 900 520 5.0
13,000 351 312 1,606 1,100 545 4.9
14,000 396 352 1,826 1,300 570 4.8
15,000 741 692 2,046 1,500 595 4.9
16,000 806 752 2,266 1,700 620 4.8
17,000 871 812 2,486 1,900 645 4.7
18,000 936 872 2,926 2,100 890 6.3
20,000 1,066 992 3,806 2,500 1,380 9.1
25,000 1,391 1,292 6,006 4,600 1,505 8.5
30,000 1,586 1,534 8,206 6,700 1,558 7.7
35,000 1,713 1,662 10,406 8,800 1,657 7.2
40,000 1,835 1,782 12,606 10,900 1,759 6.9
45,000 1,953 1,898 14,806 13,000 1,861 6.6
50,000 2,067 2,010 17,006 15,100 1,963 6.3
60,000 2,289 2,230 21,406 19,300 2,165 6.0
70,000 2,503 2,446 25,806 23,500 2,363 5.7
80,000 2,712 2,654 30,206 27,700 2,564 5.4
90,000 2,921 2,862 34,606 31,900 2,765 5.3
100,000 3,130 3,070 39,006 36,100 2,966 5.1
             
             
EXAMPLE 6
   Married couple, one income, no children taxed under PAYE
   Modified rate PRSI contributor
GROSS         PRSI/Levy Liability             Tax Liability Total Gain as % of
INCOME Existing Proposed Existing Proposed Gain Net Income
ú ú ú ú ú ú %
9,000 0 0 0 0 0 0.0
10,000 0 0 0 0 0 0.0
11,000 0 0 132 0 132 1.2
12,000 99 99 352 0 352 3.0
13,000 108 108 572 0 572 4.6
14,000 117 117 792 200 592 4.5
15,000 426 426 1,012 400 612 4.5
16,000 455 455 1,232 600 632 4.4
17,000 484 484 1,452 800 652 4.3
18,000 513 513 1,672 1,000 672 4.2
20,000 571 571 2,112 1,400 712 4.1
22,000 629 629 2,552 1,800 752 4.0
24,000 687 687 2,992 2,200 792 3.9
26,000 745 745 3,432 2,600 832 3.8
28,000 790 803 3,872 3,000 859 3.7
30,000 830 845 4,752 3,620 1,117 4.6
35,000 931 947 6,952 5,720 1,216 4.5
40,000 1,032 1,048 9,152 7,820 1,316 4.4
45,000 1,133 1,148 11,352 9,920 1,417 4.4
50,000 1,233 1,249 13,552 12,020 1,516 4.3
60,000 1,434 1,450 17,952 16,220 1,716 4.2
70,000 1,635 1,650 22,352 20,420 1,917 4.2
80,000 1,835 1,851 26,752 24,620 2,116 4.1
90,000 2,036 2,051 31,152 28,820 2,317 4.1
100,000 2,236 2,252 35,552 33,020 2,516 4.0

EXAMPLE 7
   Married couple, one income, two children taxed under PAYE
   Modified rate PRSI contributor
GROSS PRSI/Levy Liability  Tax Liability Child Benefit Total Gain as % of Total Gain where Gain including FIS
INCOME Existing Proposed Existing Proposed Increase (a) Gain Net Income (b) FIS applies (c) as % of Net Income (d)
£ £ £ £ £ £ £ % £ %
9,000 0 0 0 0 500 500 5.0 1,280 10.3
10,000 0 0 0 0 500 500 4.6 1,280 10.0
11,000 0 0 0 0 500 500 4.2 1,280 9.7
12,000 99 99 0 0 500 500 3.9 1,280 9.4
13,000 108 108 0 0 500 500 3.6 968 6.8
14,000 117 117 132 0 500 632 4.3 1,152 7.8
15,000 426 426 352 0 500 852 5.6 852 5.6
16,000 455 455 572 0 500 1,072 6.7 1,072 6.7
17,000 484 484 792 200 500 1,092 6.6 1,092 6.6
18,000 513 513 1,012 400 500 1,112 6.4 1,112 6.4
20,000 571 571 1,452 800 500 1,152 6.1 1,152 6.1
22,000 629 629 1,892 1,200 500 1,192 5.8 1,192 5.8
24,000 687 687 2,332 1,600 500 1,232 5.6 1,232 5.6
26,000 745 745 2,772 2,000 500 1,272 5.4 1,272 5.4
28,000 790 803 3,212 2,400 500 1,299 5.2 1,299 5.2
30,000 830 845 4,092 3,020 500 1,557 6.0 1,557 6.0
35,000 931 947 6,292 5,120 500 1,656 5.8 1,656 5.8
40,000 1,032 1,048 8,492 7,220 500 1,756 5.6 1,756 5.6
45,000 1,133 1,148 10,692 9,320 500 1,857 5.4 1,857 5.4
50,000 1,233 1,249 12,892 11,420 500 1,956 5.3 1,956 5.3
60,000 1,434 1,450 17,292 15,620 500 2,156 5.1 2,156 5.1
70,000 1,635 1,650 21,692 19,820 500 2,357 5.0 2,357 5.0
80,000 1,835 1,851 26,092 24,020 500 2,556 4.8 2,556 4.8
90,000 2,036 2,051 30,492 28,220 500 2,757 4.7 2,757 4.7
100,000 2,236 2,252 34,892 32,420 500 2,956 4.6 2,956 4.6
 
(a)  Value during 2001 [assuming a 12 month tax year] of the increase in Child Benefit [CB] made in the Budget, which is effective from June, 2001 [i.e. assuming 10 months of CB increase]
(b)  Net income includes CB less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
(c)  The two last columns show the total gain where Family Income Supplement (FIS) is taken up in both years.  The gain includes the value during 2001 [assuming a 12 month tax year] of the improvement in FIS made in this Budget which take effect from April, 2001 [i.e. assuming 52 weeks of FIS increase]
(d)  Net income includes CB and FIS [where relevant] less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
 
EXAMPLE 8
   Married couple, one income, four children taxed under PAYE
   Modified rate PRSI contributor
GROSS          PRSI/Levy Liability Tax Liability Child Benefit Total Gain as % of Total Gain where Gain including FIS
INCOME Existing Proposed Existing Proposed Increase (a) Gain Net Income (b) FIS applies (c) as % of Net Income (d)
£ £ £ £ £ £ £ % £ %
9,000 0 0 0 0 1,100 1,100 9.8 1,880 12.6
10,000 0 0 0 0 1,100 1,100 9.0 1,880 12.3
11,000 0 0 0 0 1,100 1,100 8.3 1,880 12.0
12,000 99 99 0 0 1,100 1,100 7.8 1,880 11.7
13,000 108 108 0 0 1,100 1,100 7.3 1,880 11.4
14,000 117 117 132 0 1,100 1,232 7.7 1,908 11.3
15,000 426 426 352 0 1,100 1,452 8.9 2,024 11.9
16,000 455 455 572 0 1,100 1,672 9.7 1,776 10.1
17,000 484 484 792 200 1,100 1,692 9.4 2,212 12.4
18,000 513 513 1,012 400 1,100 1,712 9.2 1,712 9.2
20,000 571 571 1,452 800 1,100 1,752 8.7 1,752 8.7
22,000 629 629 1,892 1,200 1,100 1,792 8.3 1,792 8.3
24,000 687 687 2,332 1,600 1,100 1,832 7.9 1,832 7.9
26,000 745 745 2,772 2,000 1,100 1,872 7.6 1,872 7.6
28,000 790 803 3,212 2,400 1,100 1,899 7.3 1,899 7.3
30,000 830 845 4,092 3,020 1,100 2,157 7.9 2,157 7.9
35,000 931 947 6,292 5,120 1,100 2,256 7.5 2,256 7.5
40,000 1,032 1,048 8,492 7,220 1,100 2,356 7.2 2,356 7.2
45,000 1,133 1,148 10,692 9,320 1,100 2,457 6.9 2,457 6.9
50,000 1,233 1,249 12,892 11,420 1,100 2,556 6.7 2,556 6.7
60,000 1,434 1,450 17,292 15,620 1,100 2,756 6.3 2,756 6.3
70,000 1,635 1,650 21,692 19,820 1,100 2,957 6.1 2,957 6.1
80,000 1,835 1,851 26,092 24,020 1,100 3,156 5.8 3,156 5.8
90,000 2,036 2,051 30,492 28,220 1,100 3,357 5.6 3,357 5.6
100,000 2,236 2,252 34,892 32,420 1,100 3,556 5.5 3,556 5.5
 
(a)  Value during 2001 [assuming a 12 month tax year] of the increase in Child Benefit [CB] made in the Budget, which is effective from June, 2001 [i.e. assuming 10 months of CB increase]
(b)  Net income includes CB less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
(c)  The two last columns show the total gain where Family Income Supplement (FIS) is taken up in both years.  The gain includes the value during 2001 [assuming a 12 month tax year] of the
       improvement in FIS made in this Budget which take effect from April, 2001 [i.e. assuming 52 weeks of FIS increase]
(d)  Net income includes CB and FIS [where relevant] less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income

EXAMPLE 9
   Married couple, two incomes, two children 
   Modified rate PRSI contributors
GROSS PRSI/Levy Liability Tax Liability Child Benefit Total Gain as % of Total Gain where Gain including FIS
INCOME Existing Proposed Existing Proposed Increase (a) Gain Net Income (b) FIS applies (c) as % of Net Income (d)
£ £ £ £ £ £ £ % £ %
9,000 0 0 0 0 500 500 5.0 1,280 10.3
10,000 0 0 0 0 500 500 4.6 1,280 10.0
11,000 0 0 0 0 500 500 4.2 1,280 9.7
12,000 0 0 132 0 500 632 4.9 1,360 10.0
13,000 0 0 352 0 500 852 6.3 1,216 8.6
14,000 0 0 572 0 500 1,072 7.5 1,592 11.1
15,000 0 0 792 0 500 1,292 8.5 1,292 8.5
16,000 0 0 1,012 200 500 1,312 8.2 1,312 8.2
17,000 0 0 1,232 400 500 1,332 8.0 1,332 8.0
18,000 0 0 1,452 600 500 1,352 7.7 1,352 7.7
20,000 108 108 1,892 1,000 500 1,392 7.3 1,392 7.3
22,000 119 119 2,332 1,400 500 1,432 7.0 1,432 7.0
24,000 443 443 2,772 1,800 500 1,472 6.8 1,472 6.8
26,000 481 481 3,212 2,200 500 1,512 6.5 1,512 6.5
28,000 518 518 3,652 2,600 500 1,552 6.3 1,552 6.3
30,000 556 556 4,092 3,000 500 1,592 6.1 1,592 6.1
35,000 751 751 5,412 4,000 500 1,912 6.4 1,912 6.4
40,000 861 861 7,612 5,000 500 3,112 9.6 3,112 9.6
45,000 1,262 1,277 9,812 7,100 500 3,197 9.2 3,197 9.2
50,000 1,379 1,394 12,012 9,200 500 3,297 8.8 3,297 8.8
60,000 1,612 1,627 16,412 13,400 500 3,497 8.1 3,497 8.1
70,000 1,844 1,859 20,812 17,600 500 3,697 7.7 3,697 7.7
80,000 2,063 2,092 25,212 21,800 500 3,883 7.2 3,883 7.2
90,000 2,265 2,295 29,612 26,000 500 4,081 6.9 4,081 6.9
100,000 2,466 2,497 34,012 30,200 500 4,281 6.6 4,281 6.6
 
This example assumes that the joint income is divided by 65% and 35% between both spouses.
(a)  Value during 2001 [assuming a 12 month tax year] of the increase in Child Benefit [CB] made in the Budget, which is effective from June, 2001 [i.e. assuming 10 months of CB increase]
(b)  Net income includes CB less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
(c)  The two last columns show the total gain where Family Income Supplement (FIS) is taken up in both years.  The gain includes the value during 2001 [assuming a 12 month tax year] of the
       improvement in FIS made in this Budget which take effect from April, 2001 [i.e. assuming 52 weeks of FIS increase]
(d)  Net income includes CB and FIS [where relevant] less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
 
EXAMPLE 10
        Single person taxed under PAYE
        Modified rate PRSI contributor
GROSS   PRSI/Levy Liability   Tax Liability   Total Gain as % of
INCOME   Existing Proposed   Existing Proposed   Gain Net Income
£   £ £   £ £   £ %
9,000   0 0   726 300   426 5.1
10,000   0 0   946 500   446 4.9
11,000   0 0   1,166 700   466 4.7
12,000   99 99   1,386 900   486 4.6
13,000   108 108   1,606 1,100   506 4.5
14,000   117 117   1,826 1,300   526 4.4
15,000   426 426   2,046 1,500   546 4.4
16,000   455 455   2,266 1,700   566 4.3
17,000   484 484   2,486 1,900   586 4.2
18,000   513 513   2,926 2,100   826 5.7
20,000   571 571   3,806 2,500   1,306 8.4
25,000   716 716   6,006 4,600   1,406 7.7
30,000   830 845   8,206 6,700   1,491 7.1
35,000   931 947   10,406 8,800   1,590 6.7
40,000   1,032 1,048   12,606 10,900   1,690 6.4
45,000   1,133 1,148   14,806 13,000   1,791 6.2
50,000   1,233 1,249   17,006 15,100   1,890 6.0
60,000   1,434 1,450   21,406 19,300   2,090 5.6
70,000   1,635 1,650   25,806 23,500   2,291 5.4
80,000   1,835 1,851   30,206 27,700   2,490 5.2
90,000   2,036 2,051   34,606 31,900   2,691 5.0
100,000   2,236 2,252   39,006 36,100   2,890 4.9
EXAMPLE 11
   Married couple, one income, no children
   Taxed under Schedule D
GROSS PRSI/Levy Liability Tax Liability   Total Gain as % of
INCOME Existing Proposed Existing Proposed   Gain Net Income
£ £ £ £ £   £ %
9,000 398 270 0 0   128 1.5
10,000 448 300 132 0   280 3.0
11,000 498 330 352 0   520 5.1
12,000 548 360 572 200   560 5.1
13,000 598 390 792 400   600 5.2
14,000 648 420 1,012 600   640 5.2
15,000 998 750 1,232 800   680 5.3
16,000 1,068 800 1,452 1,000   720 5.3
17,000 1,138 850 1,672 1,200   760 5.4
18,000 1,208 900 1,892 1,400   800 5.4
20,000 1,348 1,000 2,332 1,800   880 5.4
22,000 1,488 1,100 2,772 2,200   960 5.4
24,000 1,628 1,200 3,212 2,600   1,040 5.4
26,000 1,768 1,300 3,652 3,000   1,120 5.4
28,000 1,833 1,400 4,092 3,400   1,125 5.1
30,000 1,873 1,500 4,972 4,020   1,325 5.7
35,000 1,973 1,750 7,172 6,120   1,275 4.9
40,000 2,073 2,000 9,372 8,220   1,225 4.3
45,000 2,173 2,250 11,572 10,320   1,175 3.8
50,000 2,273 2,500 13,772 12,420   1,125 3.3
60,000 2,473 3,000 18,172 16,620   1,025 2.6
70,000 2,673 3,500 22,572 20,820   925 2.1
80,000 2,873 4,000 26,972 25,020   825 1.6
90,000 3,073 4,500 31,372 29,220   725 1.3
100,000 3,273 5,000 35,772 33,420   625 1.0
               
               
EXAMPLE 12
   Married couple, one income, two children 
   Taxed under Schedule D
GROSS      PRSI/Levy Liability         Tax Liability Child Benefit Total Gain as % of
INCOME Existing Proposed Existing Proposed Increase (a) Gain Net Income (b)
£ £ £ £ £ £ £ %
9,000 398 270 0 0 500 628 6.6
10,000 448 300 0 0 500 648 6.2
11,000 498 330 0 0 500 668 5.8
12,000 548 360 0 0 500 688 5.6
13,000 598 390 132 0 500 840 6.4
14,000 648 420 352 0 500 1,080 7.7
15,000 998 750 572 200 500 1,120 7.8
16,000 1,068 800 792 400 500 1,160 7.7
17,000 1,138 850 1,012 600 500 1,200 7.6
18,000 1,208 900 1,232 800 500 1,240 7.5
20,000 1,348 1,000 1,672 1,200 500 1,320 7.4
22,000 1,488 1,100 2,112 1,600 500 1,400 7.2
24,000 1,628 1,200 2,552 2,000 500 1,480 7.1
26,000 1,768 1,300 2,992 2,400 500 1,560 7.0
28,000 1,833 1,400 3,432 2,800 500 1,565 6.6
30,000 1,873 1,500 4,312 3,420 500 1,765 7.1
35,000 1,973 1,750 6,512 5,520 500 1,715 6.2
40,000 2,073 2,000 8,712 7,620 500 1,665 5.5
45,000 2,173 2,250 10,912 9,720 500 1,615 4.9
50,000 2,273 2,500 13,112 11,820 500 1,565 4.4
60,000 2,473 3,000 17,512 16,020 500 1,465 3.6
70,000 2,673 3,500 21,912 20,220 500 1,365 2.9
80,000 2,873 4,000 26,312 24,420 500 1,265 2.4
90,000 3,073 4,500 30,712 28,620 500 1,165 2.0
100,000 3,273 5,000 35,112 32,820 500 1,065 1.7
 
(a)  Value during 2001 [assuming a 12 month tax year] of the increase in Child Benefit [CB] made in the Budget, which is effective from June, 2001 [i.e.
       assuming 10 months of CB increase]
(b)  Net income includes CB less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income

EXAMPLE 13
   Married couple, one income, four children
   Taxed under Schedule D
GROSS         PRSI/Levy Liability            Tax Liability Child Benefit Total Gain as % of
INCOME Existing Proposed Existing Proposed Increase (a) Gain Net Income (b)
£ £ £ £ £ £ £ %
9,000 398 270 0 0 1,100 1,228 11.4
10,000 448 300 0 0 1,100 1,248 10.6
11,000 498 330 0 0 1,100 1,268 10.0
12,000 548 360 0 0 1,100 1,288 9.4
13,000 598 390 132 0 1,100 1,440 10.0
14,000 648 420 352 0 1,100 1,680 11.1
15,000 998 750 572 200 1,100 1,720 11.0
16,000 1,068 800 792 400 1,100 1,760 10.8
17,000 1,138 850 1,012 600 1,100 1,800 10.6
18,000 1,208 900 1,232 800 1,100 1,840 10.4
20,000 1,348 1,000 1,672 1,200 1,100 1,920 10.0
22,000 1,488 1,100 2,112 1,600 1,100 2,000 9.7
24,000 1,628 1,200 2,552 2,000 1,100 2,080 9.5
26,000 1,768 1,300 2,992 2,400 1,100 2,160 9.2
28,000 1,833 1,400 3,432 2,800 1,100 2,165 8.7
30,000 1,873 1,500 4,312 3,420 1,100 2,365 9.1
35,000 1,973 1,750 6,512 5,520 1,100 2,315 8.1
40,000 2,073 2,000 8,712 7,620 1,100 2,265 7.2
45,000 2,173 2,250 10,912 9,720 1,100 2,215 6.5
50,000 2,273 2,500 13,112 11,820 1,100 2,165 5.9
60,000 2,473 3,000 17,512 16,020 1,100 2,065 4.9
70,000 2,673 3,500 21,912 20,220 1,100 1,965 4.1
80,000 2,873 4,000 26,312 24,420 1,100 1,865 3.5
90,000 3,073 4,500 30,712 28,620 1,100 1,765 3.0
100,000 3,273 5,000 35,112 32,820 1,100 1,665 2.6
               
(a)  Value during 2001 [assuming a 12 month tax year] of the increase in Child Benefit [CB] made in the Budget, which is effective from June, 2001 [i.e. assuming 10 months
colspan=10       of CB increase]
(b)  Net income includes CB less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income
 
EXAMPLE 14
   Married couple, two incomes, two children 
   Taxed under Schedule D
GROSS         PRSI/Levy Liability            Tax Liability Child Benefit Total Gain as % of
INCOME Existing Proposed Existing Proposed Increase (a) Gain Net Income (b)
£ £ £ £ £ £ £ %
9,000 456 400 0 0 500 556 5.9
10,000 488 400 132 0 500 720 7.0
11,000 521 415 352 0 500 958 8.7
12,000 553 434 572 200 500 991 8.4
13,000 586 454 792 400 500 1,024 8.2
14,000 618 473 1,012 600 500 1,057 7.9
15,000 651 493 1,232 800 500 1,090 7.8
16,000 696 512 1,452 1,000 500 1,136 7.7
17,000 746 532 1,672 1,200 500 1,186 7.6
18,000 796 551 1,892 1,400 500 1,237 7.6
20,000 896 600 2,332 1,800 500 1,328 7.5
22,000 996 660 2,772 2,200 500 1,408 7.3
24,000 1,408 1,032 3,212 2,600 500 1,488 7.3
26,000 1,534 1,118 3,652 3,000 500 1,568 7.2
28,000 1,660 1,204 4,092 3,400 500 1,648 7.1
30,000 1,786 1,290 4,532 3,800 500 1,728 7.0
35,000 2,101 1,505 5,852 4,800 500 2,148 7.7
40,000 2,416 1,720 8,052 5,800 500 3,448 11.3
45,000 2,909 2,250 10,252 7,900 500 3,511 10.7
50,000 3,096 2,500 12,452 10,000 500 3,548 10.0
60,000 3,471 3,000 16,852 14,200 500 3,623 8.9
70,000 3,846 3,500 21,252 18,400 500 3,698 8.1
80,000 4,146 4,000 25,652 22,600 500 3,698 7.2
90,000 4,346 4,500 30,052 26,800 500 3,598 6.4
100,000 4,546 5,000 34,452 31,000 500 3,498 5.6
               
This example assumes that the joint income is divided by 65% and 35% between both spouses.
(a)  Value during 2001 [assuming a 12 month tax year] of the increase in Child Benefit [CB] made in the Budget, which is effective from June, 2001 [i.e. assuming 10 months
       of CB increase]
(b)  Net income includes CB less deductions of tax, levy and PRSI [where appropriate] and so may be higher than the gross income

EXAMPLE 15
        Single person taxed under Schedule D
        Modified rate PRSI contributor
GROSS            PRSI/Levy Liability                 Tax Liability Total Gain as % of  
INCOME Existing Proposed Existing Proposed Gain Net Income
£ £ £ £ £ £ %
9,000 398 270 946 700 374 4.9
10,000 448 300 1,166 900 414 4.9
11,000 498 330 1,386 1,100 454 5.0
12,000 548 360 1,606 1,300 494 5.0
13,000 598 390 1,826 1,500 534 5.0
14,000 648 420 2,046 1,700 574 5.1
15,000 998 750 2,266 1,900 614 5.2
16,000 1,068 800 2,486 2,100 654 5.3
17,000 1,138 850 2,706 2,300 694 5.3
18,000 1,208 900 3,146 2,500 954 7.0
20,000 1,348 1,000 4,026 2,900 1,474 10.1
25,000 1,698 1,250 6,226 5,000 1,674 9.8
30,000 1,873 1,500 8,426 7,100 1,699 8.6
35,000 1,973 1,750 10,626 9,200 1,649 7.4
40,000 2,073 2,000 12,826 11,300 1,599 6.4
45,000 2,173 2,250 15,026 13,400 1,549 5.6
50,000 2,273 2,500 17,226 15,500 1,499 4.9
60,000 2,473 3,000 21,626 19,700 1,399 3.9
70,000 2,673 3,500 26,026 23,900 1,299 3.1
80,000 2,873 4,000 30,426 28,100 1,199 2.6
90,000 3,073 4,500 34,826 32,300 1,099 2.1
100,000 3,273 5,000 39,226 36,500 999 1.7
AVERAGE TAX RATES *
ANNUAL EARNINGS SINGLE MARRIED ONE INCOME MARRIED TWO INCOMES**
    2 CHILDREN 2 CHILDREN
 FULL RATE PRSI     £ 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001
5000 7.5% 5.0% 0.0% 0.0% 0.0% 0.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
10000 19.0% 16.7% 13.7% 9.5% 5.0% 7.0% 5.8% 3.6% 0.0% 0.0% 5.2% 3.6% 0.0% 0.0% 0.0%
15000 27.1% 24.4% 22.1% 18.6% 14.6% 20.1% 17.8% 13.9% 7.3% 4.6% 15.2% 12.7% 8.7% 5.3% 0.0%
20000 34.0% 31.5% 29.7% 24.4% 17.5% 23.2% 21.1% 18.1% 12.6% 9.0% 19.0% 16.7% 13.7% 9.5% 5.0%
30000 40.1% 37.9% 36.7% 32.6% 27.4% 28.2% 25.7% 23.1% 18.9% 15.2% 27.1% 24.4% 22.1% 18.6% 14.6%
50000 44.3% 42.2% 41.4% 38.1% 34.2% 37.1% 34.9% 33.2% 29.9% 26.9% 37.9% 35.6% 34.3% 29.6% 23.6%
 MODIFIED PRSI      £                              
5000 7.5% 5.8% 0.7% 0.0% 0.0% 0.7% 0.7% 0.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
10000 17.2% 15.3% 12.3% 9.5% 5.0% 5.2% 4.4% 2.3% 0.0% 0.0% 5.1% 4.3% 0.7% 0.0% 0.0%
15000 24.7% 22.3% 20.0% 16.5% 12.8% 17.7% 15.7% 11.8% 5.2% 2.8% 13.9% 12.1% 8.1% 5.3% 0.0%
20000 31.3% 29.0% 27.2% 21.9% 15.4% 20.5% 18.6% 15.6% 10.1% 6.9% 17.2% 15.3% 12.3% 9.5% 5.0%
30000 37.7% 35.6% 34.3% 30.1% 25.2% 25.8% 23.4% 20.7% 16.4% 12.9% 24.7% 22.3% 20.0% 16.5% 12.8%
50000 42.8% 40.6% 39.8% 36.5% 32.7% 35.6% 33.3% 31.6% 28.3% 25.3% 35.2% 33.0% 31.6% 26.9% 21.3%
 SELF EMPLOYED    £                              
5000 12.3% 11.5% 8.1% 5.6% 4.0% 4.3% 4.3% 4.3% 4.3% 4.0% 8.6% 8.6% 8.6% 8.6% 8.0%
10000 22.9% 20.9% 18.4% 16.1% 12.0% 8.9% 8.1% 8.1% 4.5% 3.0% 8.7% 7.9% 7.9% 5.6% 4.0%
15000 31.1% 28.6% 25.4% 21.8% 17.7% 22.9% 20.8% 17.2% 10.5% 6.3% 20.3% 18.2% 14.9% 12.5% 8.3%
20000 37.1% 34.7% 32.3% 26.9% 19.5% 25.5% 23.4% 20.7% 15.1% 11.0% 22.9% 20.9% 18.4% 16.1% 12.0%
30000 42.0% 39.9% 38.4% 34.3% 28.7% 30.1% 27.8% 24.8% 20.6% 16.4% 31.1% 28.6% 25.4% 21.8% 17.7%
50000 45.3% 43.3% 42.3% 39.0% 36.0% 38.2% 36.0% 34.1% 30.8% 28.6% 40.4% 38.3% 36.4% 31.7% 25.0%
 * Average Tax Rates:  Total of Income Tax, Levies and PRSI as a proportion of gross income.  This measure includes only the standard PAYE and personal income tax allowances. It does not include the impact of any other allowances or reliefs.
 
** The Married Two-Incomes figures assume that both spouses are earning equal amounts.
 
(iv) DISTRIBUTION OF INCOME EARNERS
ON INCOME TAX FILE
 
    Exempt     Marginal     Standard     Top     Total  
          Rate     Rate     Rate        
Pre- Budget   534,803     7,334     718,098     508,765     1,769,000  
    (30%)     -     (41%)     (29%)        
Post-Budget   667,775     4,524     694,513     402,188     1,769,000  
    (38%)     -     (39%)     (23%)        

(v)    ILLUSTRATIVE CASES
 
These cases deal only with basic personal tax allowances and the PAYE allowance.  Discretionary tax reliefs such as mortgage interest relief, or charges e.g. BIK are not dealt with.  Personal Tax Credits are shown as standard rated allowances with the equivalent Tax Credit value shown in brackets.  All examples are on a full year 12 months basis for purposes of comparison.
 
Caroline
Caroline is single and employed earning £11,500.  She will gain £476 from the Budget.
 
    Budget 2000 Budget 2001
    £ £
  Gross Income 11,500 11,500
  Total Allowances 5,700 7,500
  (Equivalent Tax Credits) (1,254) (1,500)
  Income Tax 1,276 800
  PRSI & Levy 0 0
  Net Cash Income 10,224 10,700
  Deduction as % of Gross Income 11.1% 7.0%
       
       
Paul and Mary      
       
Paul and Mary are a retired couple.  Paul is aged 68 and Mary is aged 66.  Paul has an occupational pension of £7,250 and an old age pension of £8,351 which will increase to £9,651 after the Budget.  After the new tax year they will be outside the tax net.  They will gain £1,540 from the Budget as a result of the tax and social welfare changes.
 
    Budget 2000 Budget 2001
    £ £
  Gross Income 15,601 16,901
  Total Exemption Limits 15,000 17,000
  Income Tax 240 0
  Net Cash Income 15,361 16,901
  Deduction as % of Gross Income 1.5% 0.0%
The increase in Gross Income is due to increases introduced in social welfare payments.
 
John and Orla      
 
John and Orla are married.  John is employed earning £35,000 while Orla works in the home.  They have two children, they will gain £1,803 from the Budget
 
    Budget 2000 Budget 2001
    £ £
  Gross Income 35,000 35,000
  Total Allowances 13,400 16,000
  (Equivalent Tax Credit) (2,948) (3,200)
  Income Tax 6,292 5,120
  PRSI & Levy 1,713 1,662
  Child Benefit 940 1,520
  Net Cash Income 27,935 29,738
  Deduction as % of Gross Income & CB 22.3% 18.6%
       
Liam and Sophie      
 
Liam and Sophie are a married couple with three children.  Liam is employed earning £40,000 and Sophie is employed earning £10,000.  They will gain £3,575 from the Budget.
 
    Budget 2000 Budget 2001
    £ £
  Gross Income 50,000 50,000
  Total Allowances 11,400 15,000
  (Equivalent Tax Credit) (2,508) (3,000)
  Income Tax 12,012 9,420
  PRSI & Levy 1,835 1,782
  Child Benefit 1,562 2,492
  Net Cash Income 37,715 41,290
  Deduction as % of Gross Income & CB 26.9% 21.3%
 
John and Sheila      
 
John and Sheila are a married couple with two children.  John is self-employed and runs his own business and earns £40,000.  Sheila is a school teacher and earns £30,000.  They will gain £3,670 from the Budget.
 
    Budget 2000 Budget 2001
    £ £
  Gross Income 70,000 70,000
  Total Allowances 10,400 13,000
  (Equivalent Tax Credit) (2,288) (2,600)
  Income Tax 21,032 18,000
  PRSI & Levy 2,903 2,845
  Child Benefit 940 1,520
  Net Cash Income 47,005 50,675
  Deduction as % of Gross Income & CB 33.7% 29.2%
 
Sarah      
 
Sarah is a widow aged 68, with a pension from her late husband's employment of £12,000.  She is also in of a widow's contributory pension of £4,633 which will increase to £5,304 in the Budget.
She will gain £1,079 as a result of the tax and social welfare changes in the Budget.
 
    Budget 2000 Budget 2001
    £ £
  Gross Income 16,633 17,304^
  Total Allowances 7,500 9,300
  (Equivalent Tax Credit) (1,650) (1,860)
  Income Tax 2,009 1,601
  Net Cash Income 14,624 15,703
  Deduction as % of Gross Income 12.1% 9.3%
The increase in Gross Income is due to increases introduced in social welfare payments.

Blaithin
 
Blaithin is single and has a four year old son.  Blaithin works as a technician and earns £23,000.  She will gain
£1,778 from the Budget.
 
    Budget 2000 Budget 2001
    £ £
  Gross Income 23,000 23,000
  Total Allowances 10,400 13,000
  (Equivalent Tax Credit) (2,288) (2,600)
  Income Tax 3,399 2,000
  PRSI & Levy 1,261 1,172
  Child Benefit 470 760
  Net Cash Income 18,810 20,588
  Deduction as % of Gross Income & CB 20.0% 13.4%
 
As the move to a tax credit system will be completed in April 2001, all taxpayers income tax will be calculated
using the tax credit system.  The following example shows how the tax liability is calculated using the tax credit system when applied to the example above.
 
Blaithin
 
Blaithin is single and has a four year old son.  Blaithin works as a technician and earns £23,000.  She will gain
£1,778 from the Budget.
 
      Budget 2001
      £
  Gross Income   23,000
  Standard Band   23,150
  Tax Liability (£23,000 @20%)   4,600
  Less Tax Credits (£13,000 allowances @ 20%)   -2,600
  Total Income Tax Due   2,000
  PRSI & Levy Due   1,172
  Total Liability   3,172
  Child Benefit   760
  Net Cash Income   20,588