Joan Burton (Dublin West, Labour) | Oireachtas source

In respect of the reference to unearned income, which was raised by Senator Norris, I point out to him, given that he is a very distinguished Joycean scholar, that the definition for "unearned" dates back to before Joyce's time. Broadly, if I can remember my income tax law, there are categories of earnings from employment, trade or a profession where one carries on an activity and income streams arise from the activity. That is distinguished that from what would have been, in those days, largely income from rents, such as, for example, the income stream that flows from land, which is an asset. At the time people like Marx were very occupied with the idea as well, and income from capital sums lodged in banks were income streams. It is simply an old distinction but Senator Norris is possibly correct that the language should be changed.

It is something we inherited from the time of Joyce, and I am sure he made some references to it in terms of commercial operations in Dublin at the time.

Regarding Senator Power's points, the rates that apply in general to any source of income for taxation purposes also apply to income for the purposes of charging PRSI. It is the Minister for Finance who broadly deals with the charging of taxation, and the companion charge is PRSI. The income on which PRSI is applied, therefore, will in general be the same as that for the charging of taxation. The basis for general taxation, income tax or other forms of taxation that may apply to particular revenue streams is the same as that which applies to PRSI.

The point in our system, in terms of the Social Insurance Fund, is that there were areas of income that did not give rise to PRSI. In the rental example to which the Senator referred she is talking about a stream of rental income and if the stream of rental income is under €3,174 the PRSI charge would not apply. For somebody with a rental income - one property and so on as the Senator describes it - ultimately, it may be that over a long period of time and as the economy recovers those losses may be recovered. As the Senator rightly said, people in other lines of business such as banking have significant carry-forward loss provisions but people involved in renting also can do that in a more constrained way against those sources of income. However, that is a matter for the Minister for Finance.

In terms of social protection, what the Minister for Finance laid out in his budget provisions in December 2012 was to provide for wider streams of income to go into PRSI. I strongly support that because the Social Insurance Fund, which is the basis of our paying widow's pensions and retirement pensions, this year will be in deficit to the tune of approximately €1.5 billion. At the height of the crisis that went up to over €2 billion. If we want to continue paying the existing level of pensions to our pensioners and retired people, never mind increasing those in the future, we must have a replenished, strong Social Insurance Fund. That is the argument of the Minister for Finance regarding this broadening of the PRSI base.