A leading Social Justice campaigner has claimed that proposed new
social charges on income by Finance Minister Brian Lenihan may be too
severe on the poor.
Social Justice Ireland director Sean Healy said that a new universal
social charge could have a negative impact on the working poor and
people in receipt of social welfare payments.
Last week the
government's economic think-tank, the ESRI, claimed that a 7.5% charge
on income could raise enough money to replace the current system which
sees PRSI, health levy's and income levy's charged on an earners
income.
According to Sean Healy, the proposed new system would severely
affect the poorest 20% of income earners.
He said, “There would be a
huge negative impact on people on welfare and the working poor. The
beneficiaries would be the top 20% who would see their contributions to
government go down.”
Healy also claimed that people on welfare could be compensated by
increasing welfare payments by the amount they will have to pay, while
the working poor could be compensated by making tax credits refundable.
He added however that the new payment would be useful in that it pulled all the current payments together in one payment.
SIC: CIN/IE