Lower income families could gain from refundable tax credit scheme

ALMOST 240,000 individuals in lower income families could benefit from a refundable tax credit scheme proposed to Government.

The radical plan would see earners on less than €15,000 a year receive average end-year payments of nearly €1,000 under the Social Justice Ireland proposal.

Trade union bosses as well as politicians gave their backing to the potential scheme yesterday, ahead of its submission to the Government.

Under the plan, low-income earners who do not avail of tax credits because their incomes are so low would get cash refunds, according to the anti-poverty campaign group. The move would aid struggling families who do not benefit from tax credits like higher earners, said the group’s director, Fr Sean Healy: “Our proposal to make tax credits refundable would make Ireland’s tax system fairer, address part of the working poor problem and improve the living standards of a substantial number of people in Ireland.”

Refunding tax credits to low earners would cost the Exchequer around €140 million a year as opposed to up to the €3 billion estimated by the Department of Finance. The most common tax credit refunds would be between €800 to €1,000, said the group.

Irish Congress of Trade Union general secretary David Begg gave his backing to the plan: “It seems to me that it’s not challengeable on social policy grounds at all,” he said.

Government coalition partners the Green Party also backed the landmark proposal. Party finance spokesman Dan Boyle said Finance Minister Brian Lenihan should give full consideration to the proposal.

“In a budget where many further difficult decisions have to be made, advances must also be progressed in protecting the poor in society,” said the Cork senator.

The refunded unused tax allowances would benefit some 113,000 low-income earners and a further 127,000 of their family members under the plan.

Individuals must be at least 23 years of age, have unused personal and PAYE tax credits and have been in paid employment having earned at least €4,000 a year, according to the proposed scheme.

Fr Healy added: “No cost would arise of any kind for employers. The person claims it at the end of year from the Revenue Commissioners using a system already in place.”


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