Noonan stands over increase in PRSI

Michael Noonan has defended a hike in PRSI contributions, insisting that people will benefit in the long run.

As Taoiseach Enda Kenny said the Government had ensured the richest wouldcontribute the most, the finance minister claimed low earners would still be hit.

Most workers will be forced to pay an extra €5 a week after the scrapping of the standard PRSI allowance, which was one of the headline cuts and tax increases unveiled among €3.5bn worth of austerity measures.

“For somebody on low pay, on €25,000, an extra €5 a week to replenish the social welfare fund will guarantee their benefits, but particularly their contributory pension,” said Mr Noonan.

“It’s about the best value for €5 that anybody can get.”

He also stood by the introduction of a value-based property tax, saying it waspreferable to hiking income tax and would ultimately protect workers.

Mr Noonan and Brendan Howlin, the public expenditure minister, were forced to defend the scatter-gun budget, which targeted everyone from older and ill people to the poor.

In the sixth austerity budget since the onset of the economic crisis, homeowners will pay 0.18% of the value of their home when the new charge comes into force in July. That rises to 0.25% on properties worth more than €1m.

Those eligible for different benefits and who earn below a certain thresholdwill also be entitled to defer their payments, said Mr Noonan.

The amount owed could be paid following the eventual sale of a home.

Meanwhile, Mr Howlin was forced to defend his decision to slash the respite care grant, which will be cut by €325 a year — from €1,700 to €1,375.

He said the Government was anxious to protect the core payments of socialwelfare, but had to make savings somewhere.

“The respite care grant was the only carers change we have made,” Mr Howlinsaid on RTÉ Radio.

“It is down, but it is down to a level that was paid in 2006 at the height of the boom.”

Later, the Taoiseach said the cuts had been as fair and equitable as possible.

Although he recognised it had been a difficult budget that would impact on families across the country.

“We have ensured that those who can afford to contribute most will do so,” said Mr Kenny.

“Primarily, we are supporting hard-working families struggling to make ends meet by not increasing income taxes.”

He also defended the property tax, saying the Government had ensured that everyone would make a contribution to the national effort by widening the tax base.

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