Oireachtas Joint and Select Committees

Wednesday, 26 January 2022

Committee on Budgetary Oversight

Indexation of Taxation and Social Protection System: Discussion

Photo of Seán CanneySeán Canney (Galway East, Independent)
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I thank Dr. Healy, Dr. McDonnell, Ms Murphy and Ms Rogers for their presentations. I spoke in the Dáil earlier about the cost of the living, low incomes and the situation whereby there are huge inflationary pressures. Of course, this will impact on people who are on social welfare. I made the point in the House that we should be index-linking basic payments.

On the other side of the coin - and I see this in my constituency a great deal - there are people who feel that working does not pay. People in receipt of social welfare payments get the various the add-ons that come with that, including access to Student Universal Support Ireland grants for third level education, medical cards, etc., because their income is below a certain threshold. When we, rightly so, try to bring in a system of social welfare which will mean that people will be off the poverty list and can live decent lives, how can we protect them? I do not think we are doing so at the moment. There is an anomaly whereby individuals in low-paid jobs who do not get the benefit of grants that might be applicable find will say to themselves that they would be as well off if they were on jobseeker’s benefit rather than working full time. How do we get to a stage where it does pay to work, but those who cannot work are taken care of by society?

There is a fine line here. I heard people talking about the minimum wage. We also have to take into account whether employers' can afford to pay the minimum wage, especially smaller companies that need workers but that do not necessarily have the wherewithal to pay €20, €25 or whatever it might take per hour in order to make work pay for people. There is a balancing act to be done here. I would like to get our esteemed witnesses' take on that and on how they would deal with it.

One other thing that comes into play is when we would have a situation where we have increases, we also have to increase the thresholds for people to access medical cards, social welfare or the fuel allowance, because they are all means tested. The threshold needs to be brought up and indexed as well. There is a plethora of additional items that go with social welfare payments. As one of the witnesses stated, they should all be indexed linked. That is fine. How do we keep the working person and the working families in a situation where they will benefit from being in work?