Revenue eBrief No. 81/11
22 December 2011
"Cross-border" workers and universal social charge (USC)
The rate at which an individual is charged to USC is determined by whether that individual is entitled to a full  medical card under Irish or EU  legislation. Individuals with such entitlement, who are aged under 70 years, are generally chargeable to USC at a maximum rate of 4%. In the case of an individual with income from self-employment that exceeds ?100,000 in a particular tax year, the rate is increased to 7% on the income from self-employment.
This eBrief sets out the USC position that will apply for the tax year 2012 for certain types of "cross-border" workers.
1. Entitlement to a full medical card under EU legislation
Under EU legislation, individuals are subject to the social security scheme of a single Member State. Different rules apply depending on whether an individual is sent by his or her employer to work in another Member State for up to 24 months (known as a " posted worker ") or travels from the Member State of residence to work in another Member State, returning home at least once a week (known as a " frontier worker "). These rules also apply in the case of a small number of non-EU countries, i.e. Iceland, Liechtenstein, Norway and Switzerland.
(a) "Posted workers" from EU Member States employed in the State
"Posted workers" generally continue to be subject to the social security scheme of the original Member State and not the State in which they are employed. They retain the rights and advantages acquired through social insurance contributions made in their home country and this includes access to healthcare services. The Health Services Executive (HSE) provides (on application) such individuals with full medical cards as evidence of this entitlement, provided they are not subject to Irish social security legislation, i.e. chargeable to PRSI in Ireland.
Certain forms that are obtained from the relevant public bodies in the original Member State are accepted as evidence of entitlement to a full medical card by the HSE. These are the form A1 (formerly E106) in the case of social security coverage and the form S1 (formerly E101) in the case of healthcare coverage.
Revenue has and will continue to accept the forms A1 and S1 as evidence of entitlement to a full medical card for the purposes of determining the rate at which USC is to be charged.
(b) "Frontier workers" resident in the State and employed in another EU Member State
?Frontier workers? who are resident in the State and who travel to another EU Member State to exercise the duties of their employment, returning to the State at least once a week, have entitlement to a full medical card under EU legislation.
Under a bi-lateral agreement with the UK, the usual forms A1 and S1 are not required and it is sufficient for an individual to provide evidence of employment in the UK (for example, by way of a payslip) and of not being subject to Irish social security legislation. However, establishing entitlement to a full medical card for the purposes of determining the rate at which USC is to be charged may not be relevant for these ?frontier workers? as their UK employment income is not chargeable to USC if they make a claim under section 825A Taxes Consolidation Act 1997 for "transborder relief".
Revenue will also accept evidence of employment in the UK as evidence of entitlement to a full medical card for the purposes of determining the rate at which USC is to be charged.
2. Entitlement to a full medical card under Irish legislation
"Frontier workers" resident in other EU Member States and employed in the State
"Frontier workers" who are resident in other EU Member States and who travel to the State to exercise the duties of their employment may have entitlement to a full medical card under Irish legislation, but only if the HSE regards them as being ordinarily resident in the State. In addition, such entitlement is subject to a means test.
For the tax years 2009 and 2010 in the case of income levy, and 2011 in the case of USC, Revenue treated ?frontier workers? who travelled from another EU Member State (e.g. Northern Ireland) to work in the State as being automatically entitled to a full medical card under EU legislation. However, following an examination of the relevant EU legislation and discussions with the HSE, there is, in fact, no entitlement for such treatment.
Accordingly, with effect from 1 January 2012, ?frontier workers? from another EU Member State (including, Northern Ireland) who do not obtain a full Irish medical card, will be liable to the normal maximum 7% USC rate, where they have sufficient income for this rate to apply. In the case of an individual with income from self-employment that exceeds ?100,000 in a particular tax year, the 10% rate of USC will apply to that income.
It is to be noted that, while the higher USC rate will apply, relief for USC paid in Ireland may be available where Ireland has entered into a tax treaty with the country in which the individual is resident for tax purposes and where that treaty contains a provision to the effect that the treaty will apply to any identical or substantially similar taxes that may be subsequently imposed by either State. Where treaties contain such an article, Revenue has written to Ireland?s treaty partners informing them of the introduction of the USC and accepting that it is a substantially similar tax to income tax and that it is covered by the treaty provisions, including relieving provisions.
Revenue will not seek to revise the position for the tax year 2011 in the case of USC or the tax years 2009 and 2010 in the case of income levy.
 Described in section 531AN(3) Taxes Consolidation Act 1997 as "full eligibility for services under Part IV of the Health Act 1970, by virtue of sections 45 and 45A of that Act." It does not include a GP Visit Card or a European Health Insurance Card.