Irish families could be better off by more than €800 next year once all the budget changes announced yesterday are totted up.

However, before burning the hairshirt and popping the champagne corks, they should factor in the dual hits of water charges and property tax, which will take the annual net gains for even the biggest budget beneficiaries to less than €100.

The entry point for the widely reviled universal social charge (USC) has been increased by €2,000 to just over €12,000, a move that will help 80,000 low-paid workers escape the charge entirely.

Those who earn more than €12,036 will pay a rate of 1.5 per cent on income up to that point – down from 2 per cent – and a new 3.5 per cent rate on earnings between €12,000 and €16,000, a fall of half a point.

The 7 per cent rate on income above €16,000 remains, but there was a sting in the USC tail as Minister for Finance Michael Noonan unveiled a rate of 8 per cent to apply to PAYE income over €70,000 and an 11 per cent rate on self-employed earnings over €100,000.

Both moves seem aimed at appeasing the so-called squeezed middle, who have borne the brunt of a series of swingeing cuts over the seven austerity budgets since the bubble burst.

Cut in top rate

As expected, the top income tax rate was cut by 1 per cent to 40 per cent.

The standard rate band is climbing by €1,000 to €33,800 for single people and €2,000 to €34,800 for couples.

Income tax relief will also be available on water charges up to €500 year.

Mr Noonan said it could be worth up to €100, though the saving for most will be closer to €50.

Many of the Minister’s measures were well-leaked, but he still found room for surprises, including a €5 per month increase in the children’s allowance – half the cut he imposed in 2012.

The tax bill for a single person on €45,000 will fall from €8,262 to €7,940, with USC dropping from €2,469 to €2,295, an annual saving of €496 or just under €10 a week.

The tax burden for a married couple with two children earning €70,000 drops from €14,162 to €13,680, with the USC falling from €4,219 to €4,045.

When increased child benefit and water charge relief are included the savings climb to €832, although many might not notice it when they are finished paying all their other bills.