Thursday, October 21, 2010

"New income charges will affect the poor" Sean Healy

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