I am asking the Minister for Finance, in the Budget, to take those on the minimum wage out of the USC tax thus increasing the incentive to work and reducing unemployment.
There is talk that Child Benefit will be taxed or means tested and if this is done then it is essential that low paid workers are taken out of the tax net. This should be financed by taxing all working age income, including Social Welfare, the same as working income. Currently short term Welfare payments are not counted for tax and most are exempt from the Universal Social Charge which reduces the incentive to work. I think this is unfair especially on low paid workers.
In 1981 Garrett Fitzgerald, a previous FG Taoiseach, wanted to tax short term welfare benefits but the senior officials at the Department of Social Protection refused to do it. This has resulted in the present unfair situation that people could be better off on Social Welfare than employed.