I am aware of the report referred to by the Deputy in relation to an assessment by ISME of the effect of state policies on moderate to low income earners.
The report suggests policy changes in the following four areas:
1. Adjusting PRSI to eliminate the very high marginal PRSI rate on additional income in the PRSI Transition Zone from €18,304 to €22,048 per annum.
2. Set the basic rate for qualifying for the medical card at more than 30% above the comparable Jobseekers assistance rate.
3. Replace the child element in Jobseekers payments and all other welfare schemes by substantially increasing Child Benefit, phasing out Working Family Benefit, and at the same time making the Child Benefit taxable.
4. Significantly increase the income thresholds for access to social housing. Reform or remove the link between income and local authority rent.
I would note that the above recommendations are beyond my policy remit as the Minister for Finance and as such it would not be appropriate for me to comment directly on these findings. As the Deputy will be aware, my colleague Minister Humphreys and her Department are responsible for social welfare issues while my colleagues Minister Donnelly and Minister O’Brien have responsibility for medical cards and social housing, respectively.
In relation to the suggestion to make Child Benefit payments taxable, at present Child Benefit payments are exempt from tax under section 194 of the Taxes Consolidation Act 1997. I have no current plans to deviate from this position.
More generally in relation to the taxation of moderate to lower paid employees, I would draw the Deputy’s attention to Budget 2022 income tax and USC measures. This included a substantial income tax package comprising of an increase of €50 in each of the main tax credits – personal tax credit, employee tax credit and the earned income credit – from €1,650 to €1,700. An increase of €1,500 in the income tax standard rate band for all earners was also announced. Further, the 2% rate band ceiling for USC will be increased for 2022 in line with the increase in the national minimum wage to ensure that a full-time adult worker who benefits from the increase in the hourly minimum wage rate of €10.20 to €10.50 will remain outside the top rates of USC. Further details can be located at the following link www.gov.ie/en/publication/7e491-taxation-measures/.