Joan Burton (Dublin West, Labour)

The point I was making is that it is the construction of the universal social charge by Fianna Fáil and the Green Party in Government that is the crux of the problem. The universal social charge is defined in the legislation as a tax. It is not a contribution even though, understandably, when the former Minister for Finance, the late Brian Lenihan, first mentioned it in December 2009 in the context of budget 2010 he described it as the development of what would be called a universal social contribution.

Some Deputies may recall that the ESRI did some work on the impact of such a universal social contribution. There was a favourable response to that idea because it would have meant a rebalancing of the social welfare structures and, in the longer term, would have been a way of examining the benefits self-employed people were entitled to from the system by virtue of their contributions. However, in the Minister's announcement in last December's budget, it was no longer a universal social contribution. It had become a universal social charge. When the details of the budget were announced, several Deputies in this House raised the issue that same night, including myself, Deputy Shortall and Deputy Ó Snodaigh. The then Minister for Health and Children, Deputy Harney, took much of the debate on the financial resolution because it concerned the abolition of the health levy and the other levies. The health levy exempted people with incomes of under €26,000 per annum, widows, people with a medical card and a few other categories, but the universal social charge changed all of that. The old health levy disappeared, as did the categories of people who were specifically exempted from it.

This particular bowl of spaghetti would take an awful lot of unscrambling, and it could only be unscrambled in the form of a budget. The effect of the universal social charge is very simple, but to do what the Deputy is suggesting would not be possible as a budgetary measure in the context of this Bill. I have treated it for FIS purposes. The former Minister did not do that. The Bill came in from 2011 and I am now including it in the calculations of FIS, because it is a tax and it should be dealt with for FIS purposes. This will ensure that the incentive for low-paid families at work is not decreased or narrowed. I sought to do that in this Bill. As the Minister of State, Deputy Lynch said, the Government is committed in the programme for Government to reviewing the universal social charge. The measure in respect of FIS is as far as I can go in the context of this Bill.

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