asked the Minister for Finance why workers employed by Government Departments are required to pay income tax at the full rate of 7/- in the pound; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Workers' Income Tax Payments.
6.
The Deputy may have in mind the apparent disparity between the standard rate of income tax, which is 7/- in the £ and the rate of 5s 3d which is used by employers for the purpose of PAYE calculations. The 5s 3d rate, however, is computed by deducting the earned income relief (one-fourth) from the 7/- rate. Persons not within the PAYE system, including State employees, get the earned income relief before their income is charged to tax. The tax on a given income is the same whichever method is adopted.
In view of the fact that State employees—I refer particularly to manual workers with low wages—get no opportunity of making representations as to whether the income tax assessment is fair, would the Minister not agree that something should be done now to bring these people under PAYE so that at least they will know what they are being charged?
I answered a question on these lines last week. I indicated that it was possible for State employees who were taxable to have deductions made over a period. That was a question of option. Some of them did not opt and had to pay over a shorter period. I do not understand the Deputy's suggestion that State employees outside PAYE have no opportunity of questioning the tax paid.
Obviously the Minister has little experience of the problems or the payment of lower-paid State employees. What happens is that no deductions are made until the fall of the season. Having deductions for the whole year made over a period of six months is most unfair, particularly because for some extraordinary reason, the extra deductions are made at the end of December.
The period can extend beyond six months and usually extends to ten or 11 months. In some cases a final deduction is made in March, immediately preceding the new year.
I know a good deal about how the system works through my trade union and I know that what the Minister says is not correct. Deductions are not merely made in the manner described.
I got a pension cheque once for 2/6.
Shortly before the Budget, I had a similar question, asking the Minister if he would consider putting State employees under PAYE, and he offered to consider the matter. Has he made any progress in that consideration?
I answered one or two questions subsequently in which I replied that I was satisfied with the system now working, that it was satisfactory and that I did not see any need to change it.
The Minister assured me he would consider the matter. I have had complaints before and since and I can assure the Minister the system is not working satisfactorily from the point of view of the people paying tax. It may be from the Minister's point of view. Has he closed his mind to this question?
I am not aware that any undue hardship arises.
It is the method of deduction.
Is the Minister aware that a worker on a State farm, a single man, often has got a bill for as much as £15 at a time as a result of this system and that this has caused a lot of employment trouble on these farms?
If the Deputy says so I must accept it, but there are means whereby the workers can have their tax deducted over a longer period. If Deputy James Tully has any individual cases of difficulty and lets me have a note of them, I shall consider them.
I am sure the Minister would not thank me for giving him hundreds of cases. I have here an example of somebody who has £9 deducted at the end of the quarter, instead of weekly. This man has eight children.
As a result of the supplementaries, I shall have this examined again.
That man should not have to pay it.