AN increase in the PRSI ceiling looks set to limit the gains from tomorrow's Budget. However, middle income earners will still be the main beneficiaries.
The biggest winners in this year's Budget will be a single person earning £14,000 and a married person on £30,000 a year.
The Minister for Finance, Mr Quinn, is likely to announce that employees will pay PRSI on the first £23,200 of their income instead of £22,300. The expected changes are based on figures contained in last week's White Paper on the budgetary estimates.
Businesses will also be hit as employers will have to pay the PRSI levies on the first £27,900 of their employees' salaries, up from £26,800. However, employers will benefit from an increase in PRSI exemptions for those earning under £13,500.
Despite the increases, overall gains will be more evenly spread across all income groups than recent budgets which targeted the low paid, according to research from Davy Stockbrokers.
Most taxpayers will see their incomes rise between 4 per cent and 5 per cent this year through a combination of Budget measures and the national agreement Partnership 2000, according to Mr Jim O'Leary, chief economist at the brokers.
Based on the expected contents of tomorrow's package, he has found that the taxpayers who will gain the most are the single person on £14,000 and the married person on £30,000. Both of these categories will see their take home pay rise by just over 5 per cent, or up to 3 per cent ahead of inflation.
The gains then moderate slightly so that a single person on £25,000 will get a rise of 4.1 per cent, while someone on £100,000 will gain by Just under 3 per cent.
The gains for married couples also decline shallowly to an increase of 3.4 per cent on £100,000.
Employees on £11,000 will only benefit by 4.2 per cent to 4.3 per cent, although additional measures to help those on low incomes should boost this figure.
The actual increases vary between almost £10 a week to almost £24 for a married couple on £100,000. However, the amount directly due to the Budget will be less. The single person on £15,000 will be £7 a week better off, while a married person on £20,000 will only gain £6.50 a week.
Mr O'Leary's calculations do not take into account the further, restriction in mortgage interest relief which will come into force this year.