Joan Burton (Dublin West, Labour)

I support the amendments proposed by Fine Gael. Certain categories of people who work in the public service earn very low incomes. For example, lone parents who work part time in the public service often do so because they have child care commitments. If they work only part time they can continue to receive part payment in respect of the lone parent's allowance and qualify for certain benefits such as medical cards. It is foolish in the extreme to create a huge amount of unnecessary administrative complexity in respect of the imposition of this levy on people on low incomes, some of whom, if working full time and in receipt of low income, may, if they have a couple of children, qualify for the family income supplement.

What will be achieved in financial take from people on low incomes will be lost in the plethora of appeals that will ensue from people in that category to retain key benefits such as medical cards. A later amendment on behalf of the Labour Party seeks to provide that income below €18,000 be exempt from this levy in line with the 1% levy. The Minister would be wise to introduce disregards or exemptions for people in the low income category. The cost of administering consequence means tests in respect of medical cards will far outweigh the income collected from the levy. Also, this might result in people being deterred from taking up employment, contrary to the Government's policy for the past 20 years of getting people back into the workplace, even if only part time or lone parents with child care commitments. The policy has been to encourage such people into employment rather than have them remain dependent on social welfare benefits. In that sense, the levy will create a poverty and employment trap, an issue on which there have been many studies.

The Minister could, in one fell swoop, either by adapting this amendment or the Labour Party amendment, exempt the first €18,000 of income. I support the Fine Gael amendment. For the sake of public administration, the Minister would be wise to consider adapting both amendments to address the burden which this levy places on low paid public servants. The Minister will be aware, from budget submissions from the Society of St. Vincent de Paul during the past five years, that the burden now borne by the working poor has become the heaviest burden. Taking into account housing benefit, a person in low paid employment, whether in the private or public sector, is entitled to far less than a person in receipt of social welfare payments and additional benefits such as rent supplement. The Minister will turn what is already a disincentive to people to remain at work, even if only on a part time basis, into a poverty, income and employment trap.

I appeal to the Minister to accept the amendment or, alternatively, prior to Report Stage to consult with his officials on the Labour Party amendment in regard to exemptions for people on incomes below €18,000. The money required could be taken from those on higher incomes in order to ensure fairness in respect of this levy.

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