Minister for Finance Michael Noonan has hinted that budgetary measures could prevent the Universal Social Charge (USC) increasing from four to seven per cent for some taxpayers as scheduled.

Mr Noonan said the previous Fianna Fáil-led Government had agreed the reduced rate as part of a deal struck with Independent TDs for political support, but under 2011 Finance Bill the concession will end on January 1st, 2015.

“There’s a budget in between and this is something that will be considered very carefully in the budget...I can’t make budget announcements in the middle of May but I can assure you we’re very conscious of this issue,” he said.

However, Fianna Fáil finance spokesman Michael McGrath called on Mr Noonan to rule out a hike in the charge for medical card holders immediately. He also said an estimated €123 million reduction for those earning over €100,000 was not justifiable.

“The Government has been talking up income tax cuts in the next Budget for the past few weeks but now can’t even say that medical card holders will be spared a USC hike in October’s budget,” Mr McGrath said.

Mr Noonan told RTÉ Radio One’s News at One programme preliminary discussions about the budget had already taken place in his Department, but insisted Government Ministers had not yet held talks on the matter.

Asked whether the rate for higher earning self-employed people would reduce from 10 to seven per cent, he said: “If there’s an automatic reduction we’ll look at it in the budget to see is that reduction justified and if we don’t think it’s justified we’ll legislate to leave it at 10.”

He continued: “We’re a Government and Fine Gael in particular, we’re not ‘tax and spend’. Our objective is when we have the wherewithal to reduce personal taxes and it would be going counter to our policy if we didn’t act on it.” However, he insisted it was too early to say what would happen in the budget.