(V) ILLUSTRATIVE CASES
These cases deal only with the basic personal tax credits and the employee tax credit. Discretionary tax reliefs such as mortgage interest relief, or relief on rent paid, or charges such as benefits in kind are not taken into account. For illustrative purposes, some of the figures in the attached examples are rounded to the nearest euro.


Andrew
Andrew is single and employed as a waiter and is earning €14,000 per annum. He will gain €240 from the Budget.

2003

2004

Gross Income

Standard Rate Band

Income Tax liability (€14,000 @ 20%)

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

14,000

28,000

2,800

2,320

480

0

0

480

13,520

3.4%

14,000

28,000

2,800

2,560

240

0

0

240

13,760

1.7%


Liam and Georgina
Liam and Georgina are a retired couple. Liam is aged 75 and Georgina is aged 70. Liam has an occupational pension of €31,000. After the Budget they will be outside the tax net. They will gain €400 from the Budget as a result of the tax changes.

2003

2004

Gross Income

Exemption Limits

Income Tax (€1,000@40%^)

Net Cash Income

Deductions as a % of Gross Income

31,000

30,000

400

30,600

1.3%

31,000

31,000

0

31,000

0%


^marginal relief rate of 40% payable on income in excess of the exemption limits
Note: like the majority of those over 65 it is assumed that there is no liability for PRSI

Joe and Sarah
Joe and Sarah are married with two children. Joe is employed as a salesman earning €40,000 while Sarah works in the home. They will gain €240 from the Budget.

2003

2004

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

40,000

37,000

8,660

4,610

4,050

1,336

800

6,186

33,814

15.5%

40,000

37,000

8,660

4,850

3,810

1,336

800

5,946

34,054

14.9%



Paul and Annemarie
Paul and Annemarie are a married couple with two children. Paul is a civil servant earning €35,000 and Annemarie is employed as an accountant and earning €45,000. They will gain €421 from the Budget.

2003

2004

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

80,000

56,000^

21,280

4,640

16,640

1,681

1,600

19,921

60,079

24.9%

80,000

56,000^

21,280

5,120

16,160

1,740

1,600

19,500

60,500

24.4%


^ With maximum transferability between spouses of €37,000

Martin and Karen
Martin and Karen are a married couple with three children. Martin is self employed and runs his own business and earns €35,000 and Karen is employed as a solicitor earning €65,000. They will gain €175 from the Budget.

2003

2004

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

100,000

56,000^

29,680

3,840

25,840

2,499

2,000

30,339

69,661

30.3%

100,000

56,000^

29,680

4,080

25,600

2,564

2,000

30,164

69,836

30.2%


^ With maximum transferability between spouses of €37,000

Denise
Denise is a widow aged 68, with a pension from her late husband's employment of €14,770. She is also in receipt of a widow's contributory pension of €8,102 which will increase to €8,700 in the Budget. She will gain €718 as a result of the tax and social welfare changes in the Budget.

2003

2004

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

22,872

28,000

4,574

2,825

1,749

0

0

1,749

21,123

7.6%

23,470^

28,000

4,694

3,065

1,629

0

0

1,629

21,841

6.9%


^The increase in Gross Income is as a result of the increase in social welfare payments.

Niamh
Niamh is single and has a five-year-old son. Niamh works as a hairdresser and earns €24,000. She will gain €240 from the Budget.

2003

2004

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

24,000

32,000

4,800

3,840

960

696

480

2,136

21,864

8.9%

24,000

32,000

4,800

4,080

720

696

480

1,896

22,104

7.9%