Dáil Éireann díospóireacht -
Wednesday, 9 Jul 1997

Vol. 480 No. 2

Written Answers. - Basic Income System.

Noel Ahern

Ceist:

262 Mr. N. Ahern asked the Minister for Social Welfare his Department's policy on the basic income proposals as sponsored by CORI; if CORI's most recent submission has been considered by his Department; and if he will make a statement on the matter. [13636/97]

Minister for Social Welfare (Mr. D. Ahern)

Over the past number of years the Conference of Religious of Ireland — CORI — has put forward a number of different proposals for the introduction of a basic income system in Ireland. Essentially, a basic income system would involve a payment, made by the State, to all citizens, regardless of other income, family circumstances or labour force status.

The idea of basic income is not a new one; many such schemes have been discussed in the past in both academic and political circles. However, the evidence to date for Ireland has suggested that the tax rates needed to fund such a scheme would make it extremely expensive. Various forms of basic income, including the CORI proposals, were examined by the expert working group on the integration of the tax and social welfare systems which reported last year. The expert group rejected the idea of introducing a basic income scheme because the high tax rates needed to fund it would be likely to have a negative impact on employment.

The most recent study on this topic published by CORI, entitled "Pathways to Basic Income" presents a detailed implementation plan for a basic income scheme. This new study states that, as a result of the growth in the economy in recent years and the fact that this growth is projected to continue for the next number of years, the tax rates needed to fund a basic income scheme now appear to be considerably lower than previous studies have indicated.

The current national programme, Partnership 2000, contains a commitment to carry out a further independent appraisal of the concept of, and full implications of, introducing a basic income payment taking account of the work of the ERSI, CORI and the expert working group on the integration of tax and social welfare as well as international research. A preliminary steering group for this project has been set up under the chairmanship of the Department of the Taoiseach and is due to meet later this month. My Department will be represented on this steering group.

A number of issues need to be examined before any definite decision is taken on basic income. First, the question of the tax rate needed to fund BI needs to be re-examined in the light of the CORI findings. Second, the implications for some people on low incomes would need to be examined carefully as other research has indicated that here are people on low incomes who could lose out under basic income. The effects of basic income on work incentives and its migration effects also need further study. My Department will be seeking to have all these issues examined in the context of the study referred to above.

The Deputy will be aware that there is a commitment in the Programme for Government to produce a Green Paper on the issue of basic income within two years.