Dáil Éireann debate -
Tuesday, 14 Dec 1999

Vol. 512 No. 6

Written Answers. - Tax Code.

Bernard J. Durkan

Question:

74 Mr. Durkan asked the Minister for Finance if he will consider changes in the financial proposals and estimates to encourage equal opportunity, protection of the family and the improvement of facilities and incentives for those in the lower income group; and if he will make a statement on the matter. [26872/99]

Minister for Finance (Mr. McCreevy)

I assume that the Deputy is referring to my recent announcements regarding individualisation and the £3,000 allowance for one income families whose spouses work at home to care for children, the aged and the handicapped. As I stated in my budget speech, I intend to build on last year's radical income tax reform. Therefore budget 2000 introduced many measures which will assist earners, reduce the level of tax for all taxpayers, including the elderly, exclude more people on low incomes from the tax net and remove a large number of middle-income earners on the average industrial wage from the top rate of tax.

For example, to increase the incentive to work both the standard and top rates of tax will be reduced by 2% each to 22% and 44%. Increases in the personal allowances of £500 single-£1,000 married will mean that no single taxpayer earning under £110 will pay tax. This measure will remove over 40,000 taxpayers from the tax net. The age exemption limits will be increased to £7, 500 single-£15,000 married, removing up to 10,000 elderly from the tax net. A £3,000 allowance, at the standard rate, will be introduced for one income families whose spouses work in the home to care for children, the aged and the handicapped. This measure will have the effect of removing a further 23,000 taxpayers from the tax net. Over 125,000 taxpayers will no longer be paying at the higher rate of tax, reducing by nearly one-fifth the percentage of taxpayers on the higher rate. Personal allowances for aged, blind, widows, dependant relatives and incapacitated children will be doubled and standard rated.

The Deputy will also be aware that the budget included significant social welfare and other expenditure measures as follows. Full rate personal payments for all old age and related pensions will increase by £7 per week. Other social welfare personal rates will increase by £4 per week. Qualified adult allowances will increase by a minimum of £3.80 a week. Child benefit will increase by £8 per month for the first and second child and by £10 per month for the third and subsequent children. There will be a new insurance-based carer's benefit for people who leave employment to look after persons in need of full-time care and attention. Health spending increased by £4.2 billion in 2000 compared to £3 billion in 1998. There will be £35 million in a full year for mental handicap, an additional £17 million for education and a package to increase childcare places costing £46.4 million in a full year.

The personal tax package and the expenditure measures which I have announced will make an important contribution to the promotion of social inclusion and will ensure that all our citizens share in our growing prosperity.