Liam Twomey (Wexford, Fine Gael)
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Question 42: To ask the Minister for Finance if he will consider integrating the payment of family income supplement with the tax code in order that the very low take up of this entitlement may be addressed. [18411/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The issue of paying family income supplement through the tax system was considered in late 2002 by a working group established under the Programme for Prosperity and Fairness to examine the role which refundable tax credits can play in the tax and welfare system. The group was made up of representatives of the social partners and was chaired by my Department.

A perception existed at the time that the take up of the FIS scheme was low, that it was not reaching intended beneficiaries to the extent that it might and that payment through the tax and payroll systems might help in that regard. The take up of the scheme had peaked at about 14,700 at the end of 1999 but had subsequently declined to 11,700 at end-September 2002. However, the examination undertaken suggested that some of the perceived disadvantages for eligible persons under the existing system, for example, the need to make an application to a State agency, could apply equally to FIS paid through the tax and payroll systems. The examination also suggested that it would probably not prove feasible to introduce a system whereby FIS would be paid automatically to eligible persons through the tax and payroll systems and that there would be considerable complexities involved in such a scheme for employers and for the Revenue Commissioners.

I understand that since 2002, the numbers availing of the scheme have risen significantly. Average annual numbers of claimants for the years 2002 to 2004 are 11,716, 12,303 and 13,508, respectively. In the week ending 27 May 2005, there were 15,659 claimants. This represents an increase of 30% on the December 2002 figure of 12,043. The improved take up may be due to a number of factors, including generous increases in FIS income thresholds over successive budgets, an increase in the minimum weekly FIS payment to €20, expansion of the economy and greater flexibility in working arrangements.

Having regard to the improved level of take up, I do not see that it is necessary at this time to consider implementing a change in the provision of FIS along the lines mentioned by the Deputy.

Jimmy Deenihan (Kerry North, Fine Gael)
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Question 43: To ask the Minister for Finance the increase in the number of persons who will become subject to income tax as a consequence of the increase in the minimum wage. [18414/05]

Jack Wall (Kildare South, Labour)
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Question 68: To ask the Minister for Finance if the Government is committed to keeping those on the national minimum wage out of the tax net; the number of persons on the national minimum wage who have been brought back into the tax net as a result of the increase to €7.65 per hour which came into operation from 1 May 2005; if he intends to take these low earners from the tax net; and if he will make a statement on the matter. [18285/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 43 and 68 together.

The Government is committed to having the minimum wage exempt from tax. However, we are also committed to sustaining economic growth and keeping the public finances in a healthy condition. The question of restoring the position which applied after budget 2005 where those earning the minimum wage were removed from the tax net will be a matter for consideration in the context of the annual budgets over the next number of years consistent with the Government's overall economic and budgetary strategy.

I might remind the Deputies that it was this Government that introduced the minimum wage to protect low paid workers and it was this Government who over the last eight budgets removed a record number of about 460,000 workers from the tax net entirely. In addition, I would point out that we now have one of the highest minimum wages in the European Union, second only to Luxembourg. Since its introduction in April 2000, the minimum wage has increased by almost 37% taking account of the latest increase, well ahead of inflation.

The present entry point to income tax is €14,250 per annum for a single person aged under 65. The Revenue Commissioners provisionally estimate that there will be roughly 37,000 income earners in an income range which would bring them into the tax net if their annual earnings reflected fully the increase in the national minimum wage. However, this group will of necessity include part-time workers earning more than the minimum hourly wage, and certain pensioners whose earnings are in the equivalent range. The 37,000 should, therefore, be seen as the upper band for any estimate of the number who may ultimately come into the tax net on a full year basis as a result of the minimum wage increase.