I do not accept the Deputy's point that the temporary income levy introduced in the budget is a major disincentive to work or that its introduction runs counter to the conclusions set out in the Economic Background to the Budget.
The new levy has a specific income exemption in order to protect the lower paid. In addition all medical card holders, including those whose income is above £9,000 per annum, will be exempt from the levy. Welfare payments will also be exempt from the new levy and such payments will not be taken into account in determining whether an individual qualifies for an income exemption from the levy.
The introduction of the new levy has to be seen against the background of the income increases and tax improvements of recent years, which have produced a significant increase in real take-home pay and incomes generally. I would again emphasise that the new levy is temporary and the Government are satisfied that all taxpayers, having benefited in recent years, would be prepared to make a small sacrifice now to help the maintenance both of a sound budgetary policy as an essential element in employment strategy and of adequate social services and programmes.
