Just what is the health levy which was doubled in the Government's crisis Budget?

The levy is paid by workers in insurable employment and goes towards funding the health services.

Insured workers pay it as part of their PRSI contribution, while people who have pensions from their former employers have it deducted at source. For the self-employed, the levy is payable annually with their tax and PRSI contributions under the self-assessment system. It is payable up to the age of 70.

Opposition parties hit out at the "very harsh" levy which will see low and middle-income earners fork out thousands more to fund the HSE.

Workers with salaries above €26,000 will pay twice the amount of the tax from May 1.

Those with incomes between €26,000 and €75,036 will have to pay twice the health levy, rising from 2pc to 4pc.

The tax will also double for workers with salaries in excess of €75,036, from 2.5pc to 5pc.

Before yesterday's Budget, the higher rate had applied to those earning €100,100 and upwards. The hike will see couples forking out up to €4,250 a year, a rise of €2,250.

Fine Gael's health spokesman Dr James Reilly said the hikes are "certainly going to hurt middle earners".

"There's a huge deficit in health now. What is disturbing about this Budget is [that it is] tax, tax, tax. Where is the reform? Where are the redundancies in the HSE? Where is the attempt to address the waste?"

He added: "There is absolutely no doubt that this was a lazy Budget again -- tax your way out of it instead of trying to reform the system, trying to reform public service, cut back on expenditure in the public service and get better value for money. And the HSE is the classic case."

Deputy Reilly said the Budget should have included a measure limiting the pay of the HSE chiefs.

HSE chief Brendan Drumm is on a salary and bonus package of more than €400,000. In addition, the HSE spent €4.6m in payments and bonuses to his top advisers and officials over the past four years.

"[There was] no attempt at correcting the bloated bureaucracy, no attempt at fixing the broken system," Dr Reilly added.

Labour's Jan O'Sullivan said the levy hikes were "very harsh, particularly on low and middle-income earners".

Middle-income families have been hit with a triple whammy -- the income levy, the increase in PRSI and the health levy. Tax experts say the combination of measures will cause these workers to lose between 6pc and 7pc of their net pay.

A married couple with no children earning €100,000 will now pay a health levy of €4,250, a rise from €2,000 per annum. A married couple with no children earning €200,000 will see the health levy increase from €4,150 to €8,550. For a single person with a salary of €75,000, it will rise from €1,500 to €3,000.

Health Minister Mary Harney said the extra cash would raise €160m, thereby helping to offset a €540m deficit in the HSE's 2009 budget. She said the HSE has already made €133m in savings, which do not affect frontline services.

Ms Harney expects to be able to reduce the budget overrun to €147m, while the HSE has also identified two other areas to save up to €60m.

hnews@herald.ie

- Cormac Murphy