Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I will read my briefing note for the Deputy. Over the past year I have responded to a number of parliamentary questions regarding the estimated cost of extending the PAYE-type credit to the self-employed. A number of different figures were quoted in these responses, including higher and lower costs relative to the credit introduced in budget 2016, depending on the specific question asked. For example, an estimated cost of €470 million was given to extending the employee PAYE credit in March. This was based on extending the €1,650 credit to all non-PAYE cases, including schedule D, proprietary directors and assisting spouses. This estimate included cases classed as schedule D on the basis that the majority of the taxpayer's gross income is non-PAYE. Some of these cases may have been availing of the PAYE credit. On that basis it was estimated that the credit would be available to approximately 284,600 cases. Furthermore, the March costing was based on estimated income for 2015. Budget measures are costed on the basis of estimated income for 2016. This should also be considered when comparing the two figures.

By contrast, in October a cost of €137 million was given in response to a parliamentary question on the cost of introducing an earned income credit of €1,650 for self-employed people. In this case, I specified in the response that it was assumed the credit would only be extended to cases identified to be in receipt of trading or professional Case 1 or Case 2 income for individuals not in receipt of the PAYE allowance.

The essential point is that if we costed everything and introduced it at one third of the €1,650 credit, it would amount to a credit of €550. While I did not absolutely commit to close the gap completely over a three-year period, the arithmetic would suggest that this is the trajectory. Second, I did not want double credits for anyone. If a person already has part PAYE income and had been getting €1,650, I am not proposing that we give that person an additional credit of a similar amount, ultimately, for that portion of their income from self-employed work.