Dáil Éireann Debate, Tuesday - 29 January 2019
583. Deputy Willie Penrose asked the Minister for Employment Affairs and Social Protection the reason the amount of tax paid is not allowed as a deduction in terms of the calculation of means in respect of a person applying for a disability allowance (details supplied); and if she will make a statement on the matter. [4398/19]
Amharc ar fhreagraSocial welfare legislation provides that all income and property belonging to the claimant (and his or her spouse/partner, where applicable) is assessable for means testing purposes for social assistance schemes, such as Disability Allowance. In the assessment of earnings, various disregards and tapers are in place to ensure that financial incentives exist to take up employment.
Earnings assessed for means-testing purposes generally is based on gross earnings before tax but after PRSI contributions, superannuation/PRSA contributions and trade union subscriptions.
The current entry points to the tax net ensures that employees do not have to pay income tax until earnings reach €16,500 per annum for a single person, €24,750 per annum for a married one-earner couple and a single parent, and €33,300 per annum for a married two-earner couple. Allowing taxation as a deduction would mean that the social welfare system, in effect, refunds a person's tax liability.
It should be noted that the recently enacted Social Welfare, Pensions and Civil Registration Act 2018 implemented the Make Work Pay recommendation to remove the requirement that employment must be of a rehabilitative nature in order to qualify for the Disability Allowance earnings disregards. Accordingly, all Disability Allowance recipients in employment from 31 of December 2018 will benefit from a €120 disregard of earnings from employment, with earnings between €120 and €350 per week assessed at 50%.
Any such change to the disregard for outgoings such as taxation when assessing a customer’s income or means would need to be considered in the overall policy and budgetary context.
