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

I thank the Minister for his reply. In order not to be misinterpreted, I certainly do not advocate that the home carer's tax credit be reviewed with a view to abolishing it. I am using this tax credit to highlight an issue which has arisen in the context of the budget, which is the situation facing one income couples earning approximately €40,000. They will gain from the budget to the tune of €174, which will just offset the new water charges, whereas a Deputy in the House will gain approximately €750 per annum, which is 4.3 times the cash gain of somebody earning €40,000.

In many instances, these couples earning €40,000 are really struggling because they do not qualify for anything as they are above all of the income thresholds. Given the Minister made the decision to embark on a tax-cutting package, in my view he could have designed it more fairly so the step effect between people who fall just below the entry point of the marginal rate and those above the marginal rate need not have been as great as it was constructed by the package. This is the issue I am highlighting. The Minister has acknowledged these issues will emerge when one seeks to change the entry point to the higher rate of tax and cut the marginal rate of tax itself. The net effect is people in this situation are no better off as a result of the budget. They are among the very people who are struggling the most and who need the most help from the State at this time. In contrast, people who need less support at this time are benefiting four times more. I am highlighting this issue to place it in the Minister's mind so that if he does go down this road again next year - he has indicated he will do so, with additional changes to the universal social charge and the entry point to the marginal rate and cuts to the marginal rate itself - he will take into account the people in this category who, in my view, were largely left behind this time.

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