Joan Burton (Dublin West, Labour)

I move amendment No. 6:

In page 9, between lines 26 and 27, to insert the following:

3.—Section 3 shall not come into operation save by order of the Minister which may only be made after the Minister has carried out an economic and social impact assessment of the introduction of the universal social charge, particularly in respect of those on medical cards or over the age of 70 who were previously exempted from the health and income levies, and has laid the assessment before Dáil Éireann.".

All these amendments concern the universal social charge. Amendment No. 6 in the name of the Labour Party provides for an assessment of the impact of the universal social charge

There would be an economic and social impact assessment of the introduction of the universal social charge, particularly in respect of people with medical cards or those over 70 who were previously exempt from the health and income levies. The assessment would be laid before Dáil Éireann.

The universal social charge was announced by the Minister on budget night and referred to by the Minister in his speech in December 2009 dealing with the 2010 budget. It is fair to say that for most people, the announcement of this new tax - despite being made in December 2009 - passed them by. The Minister announced significant changes in December's budget. Previously we had the health levy and the emergency tax levies on income which were introduced when the banks collapsed and had to be bailed out. It is still not fully understood by people that the previous health levy and the emergency income levies have been transformed and transferred to this new universal social charge.

A difficulty arises because with the health levy, people were exempted if income was less than €26,000, they were over 70, they were widows or widowers or if they held a medical card. This has an impact on somebody on an income of €15,000, for example, from a private or public service pension or who also has a medical card. The Minister knows from the data he gave me in recent weeks and subsequent discussions that many pensioners from public employment are on low pensions, with the bulk of public service pensions below €25,000. If such a person also had a medical card, the change would mean the universal social charge would be applied.

Yesterday's amendment, on foot of the deal done with the Independents, reduced that levy by approximately two percentage points, or by between 30% and 40%.

See this speech in context