Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 1:

In page 12, to delete lines 32 to 42 and in page 13, to delete lines 1 to 14.

We had a good discussion last week on Committee Stage. No guillotine was needed because we got through our business ahead of time. I acknowledge the manner in which the debate was approached by the Minister, Deputy Noonan, the Minister of State, Deputy Brian Hayes, and their officials. We had a good session on Committee Stage. We got a feel for each other's positions on various issues. None the less, I have chosen to elevate a small number of issues for Report Stage debate because they need to be debated on the floor of the House.

Amendment No. 1 relates to the proposal in the Finance Bill to tax maternity benefit, adoptive benefit and health and safety benefit in the same way that all other income is taxed. We debated this issue at some length on Committee Stage last week. When the Tánaiste look Leaders' Questions last Thursday, he gave the clear impression that this measure will not result in a reduction in people's incomes. I was annoyed because it was quite misleading. He said on a number of occasions "There is no reduction in income". He gave the example of a woman who continues to be paid by her employer during the course of her maternity benefit. It is true to say that after this change is made, women in the limited circumstances highlighted in the Tánaiste's example will not be any worse off, based on a comparison between what they earned while they were working and what they will receive when maternity benefit is taxed in the normal way similarly to the remainder of their salaries. Women in a small number of cases will be worse off, however, because they will not receive the bonus they would have received until now by virtue of the non-taxation of maternity benefit. That is just a small part of the picture, however. It was misleading of the Tánaiste to make those comments without giving the full facts.

The bottom line is that the Department of Finance has estimated that a yield of €40 million will accrue from this change in a full year. Where will that €40 million come from? It will come from the pockets of pregnant women. That is the bottom line. In some circumstances, a woman will have used up her tax credits and her lower-rate band during the months she worked before she went on maternity leave, or she could use them up after she returns from maternity leave. I accept that will not happen in every case. It could also happen that the woman's partner or spouse will use her available credits and her lower-rate band and, as a consequence, her maternity benefit will be taxed in full. Some women who would otherwise have received maternity benefit of €262 per week will now receive maternity benefit that is reduced by €107 per week. I acknowledge that this will not happen in every case, but some women will be affected in this way. They will lose €2,800 over the course of their six months of paid maternity benefit.

It is important to put those facts on the record because last Thursday's debate was misleading. Anyone who followed it would have formed the clear impression that no woman will be any worse off as a result of this change. That is simply not the case. Some women will lose the bonus they gained by virtue of the non-taxation of maternity benefit.

I do not believe there is any objection among most Members of this House to deal with that issue but there will be other cases where women will lose out to the tune of €107 per week, or €2,800 over the course of the six-month maternity benefit.

I know the Minister is not for turning on this issue. I wanted to put on the record that those are the consequences for some people and to, in a fair way, point out that some are affected very severely by this while others will not be affected as severely. I repeat what I said on Committee Stage last week, namely, this is a tax on pregnancy and it will affect women during a very important time in their lives, when they are bringing life into this world and should be given every possible support. The Government will say it is aligning this with the taxation of other forms of social welfare but, as I pointed out last week, there continues to be a number of social welfare heads that are not subject to income tax whereas this one will now be. It will have an affect. At the end of the day, it is €40 million out of the pockets of pregnant women. Let us call it what it is and not try to dress it up in any way that would mislead people.

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