POSSIBLE CONCESSIONS:THE UNIVERSAL 1 per cent income levy imposed as part of the Budget may be modified to exclude pensioners and those on the minimum wage when the Finance Bill is published on November 20th, according to Government sources.
This morning's Cabinet meeting will discuss proposals put forward by the Irish Congress of Trade Unions last week that all those earning €23,000 or less be excluded from the levy.
Over the weekend, both Taoiseach Brian Cowen and Minister for Finance Brian Lenihan signalled a possible concession.
Mr Lenihan said that they may be willing to look "at the edges" of the proposal to see if there was room for manoeuvre.
Government sources last night said that those on the State pension and those with an annual income at or below the yearly minimum wage of €17,500, about one-third of the workforce, are likely to benefit from any change.
However, it was emphasised that, following the meeting between Mr Cowen and David Begg, secretary general of Ictu, last week, the Government has given an undertaking to consider the proposals but has not committed to making any decision.
"We do not anticipate any outcome on these discussions until the Finance Bill is published on November 20th," said the sources.
However, there is a strong likelihood that pensioners will be exempted because the cost is minimal, no more than €6 million per annum.
If those on or below the minimum wage are included, it will cost some €50 million, which will have to be found from elsewhere.
Yesterday, Mr Begg said the reason for choosing the cut-off point at €23,000 was that it was the limit for the 0.5 per cent pay increase and there was common agreement in the pay talks that anybody earning less than that was low paid.
"We do have a growing problem in the country of the working poor. Seven per cent of people at risk of poverty are classified as working poor," he told RTÉ yesterday.
On his discussion with Mr Cowen following last week's Budget, Mr Begg outlined the approach adopted: "We explained that in our opinion the essence of governance is that you put forward what you want to do, but if it hurts very badly as was the case for the lower paid and the medical cards for the elderly, the essence of good leadership is that you sometimes row back a little on that."
The country's largest union, Siptu, has called for the cut-off point to be raised to €38,000, which is the average industrial wage.
Another of the major unions, Mandate, yesterday said the limit should be similar to that set out by Ictu. Its general secretary, John Douglas, said of the group earning below this limit. "These are the members of society who need protection most in the current economic climate."
The Green Party also welcomed a move in this direction. Party chairman Senator Dan Boyle called for a lowering from €100,000 of the limit at which the 2 per cent levy would come in.
"We believe that these changes will make the levy more progressive and fairer on lower-income households," he said.
