Oireachtas Joint and Select Committees

Tuesday, 16 November 2021

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach

Finance Bill 2021: Committee Stage

Photo of Mairead FarrellMairead Farrell (Galway West, Sinn Fein)
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This amendment to the USC 2% threshold is to account for the increase in the national minimum wage in 2022. It moves the threshold from annual income of €20,687 to €21,295 to ensure that the 2% rate remains the highest rate of USC charged on the income of full-time minimum wage workers. This has arisen from the 30% increase to the minimum wage that was recommended by the Low Pay Commission.

I would have huge concerns that this 30 cent increase will not do much for the people who are relying on this minimum wage when inflation is currently running at approximately 5%. The Minister has raised on many occasions his concern about the rise in inflation. This 30 cent increase will only bring it up to €10.50. Putting it in context, we all will be aware, if we look at our local butchers or our local shop, that there are price increases. This increase will not be enough to offset the cost of inflation that we are witnessing. According to conservative estimates, there are 135,000 people on the minimum wage and relying on this. We need to be mindful of the real-life impact when discussing this. These are not only figures. They represent people who are relying on this. We see the huge rise in inflation and the cost of living in energy prices, etc., and the impact that it will have. The minimum wage is still far lower than the living wage of €12.90. We need to be quite ambitious in this regard because people are struggling on a daily basis.

I welcome the move to extend the reduced rate of USC until the end of 2022 for full medical card holders under 70 years of age whose individual annual income does not exceed €60,000 but, although the Finance Bill can be quite technical and although it can seem removed from society, we need to think of the real-life impact that those people who are on the minimum wage experience due to the increase in inflation and the increased cost of living. I wanted to raise that. It is important that it is noted in the Finance Bill.