SOCIAL JUSTICE Ireland director Fr Seán Healy has said a new universal social charge could have a negative impact on the working poor and people in receipt of social welfare payments.
Research from the Economic and Social Research Institute (ESRI) said a 7.5 per cent charge could raise enough money to replace PRSI, the health levy and the income levy. Fr Healy said the poorest 20 per cent of the population would be the “major losers” if the proposal, signalled by Minister for Finance Brian Lenihan last year, was introduced.
“There would be huge, negative impact on people on welfare and the working poor. The beneficiaries would be the top 20 per cent who would see their contributions to government go down,” he said.
Fr Healy said people on welfare could be compensated “by increasing the welfare payment by the amount they’ll have to pay”, while the working poor could be compensated by making tax credits refundable.
He said the proposal would be beneficial in the sense that it would pull together various payments that people have to make. “However, the working poor shouldn’t lose out as a result of initiatives of this kind,” he added.
Labour’s spokeswoman on social and family affairs Róisín Shortall said the PRSI system needed to be reformed, but not in the way that was being proposed.
“It would be extraordinary for government to consider bringing in a new system which shifted the burden away from the better off and towards those with lower income,” Ms Shortall said.
A spokesman for Fine Gael said the proposal needed careful consideration.
