Thursday, July 2, is D-Day, where the D stands for “devastation” for the many lone parents who will suffer a substantial drop in income because of the change in the criteria for payment that the Tánaiste Joan Burton will implement, Fianna Fáil’s Spokesman on Social Protection Deputy Willie O’Dea told the Dáil.
Speaking during Question Time, he asked if the Department carried out a social impact assessment, or an assessment of the possible effects on those who will lose out thereby?
“Apparently an impact assessment was done on the Budget measures and, according to the Minister, this showed that all lone parents, working or not working, would be better off as a result of the changes being introduced by the Government,” he said.
“It is a wonder that lone parents from one end of the country to the other are not doing cartwheels with delight now that they are all going to be better off. I wonder what they are all worried about.”
Deputy O’Dea said the Minister gave a specific and solemn commitment to the House that she would not introduce this change until we had a Scandinavian-type child care system in this country.
“When I asked her about it she said that child care was a matter for another Department, the Department of Children and Youth Affairs,” she said.
“However, this change in the criteria for lone parent allowance is a matter exclusively for herself. Does she intend to renege on the solemn promise she gave to this House and, through the House, to the lone parents from one end of this country to the other?”
In response, the Tánaiste said the purpose of the reform of the One-Parent Family Payment is to maximise the opportunities for lone parents to enter into employment and thus to increase their income.
“The Department has published a social impact assessment of the main welfare and tax measures of Budget 2015 and of the water charges,” she said.
“It found that the household incomes of employed lone parents will increase by almost 0.8%, while those of unemployed lone parents will increase by 0.6%.
“This positive outcome for lone parents reflects the increases in child benefit, the partial restoration of the Christmas bonus, the reduction of the USC for many lone parents in work, the back-to-work family dividend and the maintenance of the disregard at €90.”
Burden of income tax too high - Noonan
A fair, efficient and competitive income tax system is essential for economic growth and job creation, the Minister for Finance Michael Noonan told the Dáil.
Replying to questions from Opposition deputies, he said he had long said that the burden of the income tax system in Ireland is too high and that he would seek to reduce it as soon as it was prudent to do so.
“Ireland already has one of the more progressive income tax systems in the developed world.
“As a result of the changes I introduced in Budget 2015, all those who paid income tax or USC in 2014 will see a reduction in their tax bill for 2015, where incomes are equal,” he said.
“However, to preserve the progressivity of the income tax system, the Budget measures were specifically designed to ensure that those with very high incomes would only benefit to the same extent as those with more modest incomes.
“This was achieved by the introduction of the 8% USC rate for income over €70,044, confining the benefit of the reduction in the marginal rate of tax from 41% to 40% to earnings below that ceiling only. The maximum benefit from the Budget 2015 package of tax measures was, therefore, limited to approximately €14 per week for any individual taxpayer.”
Minister Noonan said the reality is that, because of the highly progressive nature of the Irish tax system, those on lower incomes pay very low levels of tax, particularly when compared to their counterparts in Europe.
“It should also be noted that, as a result of increases to the entry point to the USC introduced by this Government in Budget 2012 and Budget 2015, raising the entry point from €4,004 to €12,012 per annum, it is estimated that approximately 417,000 individuals have been exempted from the charge altogether,” he said. “This means that 28% of all income earners are not paying any universal social charge at all. Furthermore, I also reduced the two lower rates at which USC is charged and extended the threshold before the 7% rate becomes chargeable up to €17,576 per annum.”