Vol. 423 No. 1
422 Mr. Quinn asked the Minister for Social Welfare if, in respect of the recommendations of the Culliton Committee he will outline, for each recommendation concerning his Department, the action, if any, which he has already taken or proposes to take, the changes involved and the cost of such action; and if he will make a statement on the matter.
Section 4 of the report of the Industrial Review Group puts forward the view that the role of special tax exemptions, reliefs deductions and other tax expenditures should be reduced. One of the issues raised in this context is the exemption from tax of certain social welfare benefits.
In his 1992 Budget speech the Minister for Finance announced that Disability Benefit and Unemployment Benefit would in future be treated as income for tax purposes. The operational requirements to give effect to this decision are currently being studied. The Minister for Finance will through a Commencement Order, set the date (or dates) for implementation of these measures.
A second concern expressed by the Industrial Review Group was the need the achieve closer integration of the tax and social welfare systems in order to increase the incentive to work.
This is a very wide-ranging issue concerning not only the way in which PRSI contributions are levied but also the method of paying benefits. While taxation of short term benefits could be regarded as a first step towards integration of the two systems, further measures will require careful evaluation of their impact on both the insured population and social welfare recipients.
In the meantime, it is my intention that the future development of the social welfare system will place increased emphasis on the need to maintain and enhance the incentive to work.
