#Budget18: Donohoe announces changes to income tax bands and USC

The Finance Minister spoke at length on income taxes during today's Budget announcements.

This is where the payback begins for average working families.

Taoiseach Leo Varadkar had already billed it as being worth €500-600 a year.

Mr Donohoe said: "We cannot hope to remain competitive if someone on a relatively low income and who decides to work a few hours' overtime has nearly half that extra money taken in tax."

The threshold for the higher rate of income tax was being raised by €750 to €34,550.

This is being combined with changes to the deeply unpopular Universal Social Charge (USC) - a levy introduced during Ireland's economic collapse but targeted at all but the lowest earning workers.

The USC has an entry point of €13,000.

A new 2% rate will kick in at €19,372, up from €18,772, so minimum wage workers will not pay the upper rates.

A second USC rate will drop to 4.75%.

Mr Donohoe said the top marginal rate of tax on income up to 70,044 euro will be 48.75% as a result of the changes.