The Government's controversial tax individualisation scheme has been branded unfair by the main Opposition parties.Labour and Fine Gael have both pointed to a growing income gap between homes with a stay-at-home spouse and those where both spouses are working. Now the issue looks set to become an election issue.
The difference in take-home pay has widened after changes made by the Minister for Finance in the 2007 Budget.
According to the Labour party, a single-income family could now pay up to €5,250 more in tax than their double-income counterpart.
In 2006, the gap between double income and single income families was €5060. However it is thought that Opposition parties have noticed increasing resentment among voters in sole-breadwinner homes.
Dual-income couples have a significant advantage in terms of two standard PAYE tax credits, worth €1,760 each.
'Budget 2007 has exacerbated the discrimination in tax between the two family types by continuing the policies initially introduced by Charlie McCreevey through individualisation,' said Labour finance spokeswoman Joan Burton on Sunday.
'The cost of this policy to these families is now close to €700m a year, based on the Revenue Commissioners pre-budget analysis.'
'There are approximately 75,000 one-income households earning between 150pc and 250pc of average earnings,' Ms Burton said.
'These are families who have committed to caring for their children themselves or to looking after aged relatives. And the policy of individualisation is now costing them very dear.'
Meanwhile, an article in the Irish Catholic last week called for the Catholic Church to make its voice heard in the debate over individualisation.
Barrister John Byrne said that the policy was another example of how the Government 'prioritised the individual's role in the economy over the individual's role as part of the family.'
And he argued that this would lead to social problems, as the children of parents who were not present in their lives would have less influence over these children. This 'can cause problems later on in life for the child and for society; including a higher risk of unemployment,' Mr Byrne said. It was in this context that he argued that the Government's individualisation policy caused real problems.
The policy, he said 'takes away the freedom for families to equitably choose' between being a single or a double income couple. He continued ' it denies some families the freedom to leave one spouse at home to mind children where otherwise they would wish to do this.'
He continued by saying that the debate on the issue had become dominated by voices who did not have best interests of the family at heart. However, he pointed out that a more significant problem was that there was 'no voice from the other side of the argument.'
'Even as recently as fifteen years ago the Catholic Church .... would have lashed out against any attempt to weaken the family in this way; at any attempt to weaken the status of carers in the home in this fashion,' he went on.
'If the Catholic Church does not speak out for the family on this issue then who will?' he asked.
He concluded by contending that the Church needed to add its 'moral authority' to the debate on family tax policy.
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