Dr. Tom McDonnell:

I will go first. We were cognisant of this on the Commission on Taxation and Welfare because it is a salient issue. What we have at the moment is that benefits are either on or off. People qualify or they do not. There are ceilings and cliff edges that are problematic because they create distortions. What we have now that we did not have ten or 20 years ago is potentially a much better understanding of people's incomes over their lives and at a particular point and so forth. We have data from Revenue, which we used during the Covid-19 pandemic, and data from the Department of Social Protection and we can develop a system of tapered benefits. Instead of having ceilings and cliff edges, tapered benefits do not shut off a benefit, whether it is a medical card or something else. They simply reduce the value by a small percentage as a person's income rises. There is still a small disincentive but it does not create a situation where people decide not to work another two hours because they will lose something or will suddenly have a much higher tax rate. It gets rid of that. Designing that system would be technical and would have to be worked out but it is feasible to do it. It would be useful to try to develop that so that instead of having an on-off system, we would have a tapered system. That could apply to all benefits and the entire welfare system and how it interacts with the income individuals have.