Middle and single income families to be hit hardest

MIDDLE and one income families are set to be hit hardest in Brian Lenihan’s newly dubbed “bludget”.

Announced yesterday, the terms of the supplementary budget, which will come into force on May 1, will see a one income family lose about e2,500 a year.

Tax expert Michael Lynch of KPMG said the hardest hit would be a married couple living on one income of about e70,000 and with a mortgage.

For example, two parents in their 30s, one with an income of e56,000 and one child will see:

* Their income levy doubled.

* Health levy doubled.

* PRSI up 4%.

* Mortgage Interest Relief abolished.

* Child Benefit massively reduced next year.

* Early Childcare Supplement abolished within the year.

Cork TD Simon Coveney said the budget was a targeted attack on the young generation.

“Those who will bear the brunt of the pain inflicted are in their 20s and 30s on middle incomes who, if they are lucky enough to hold a job, are already struggling with mortgage repayments and the high cost of living,” he said.

“All the pre-budget pretensions by the Government that this budget would be fair have been proven to be totally false.”

Meanwhile, FG leader Enda Kenny said the budget would “squeeze the life out of middle income families”.

“What the public needed was a budget with a vision for the country that would restore hope and confidence,” he said.

“What we have got instead is a brutal attack on middle-income families that will only contribute to the economic collapse, engendered by a Government that is unable or unwilling to change the broken ways of the past.”

Mr Kenny said that while ordinary families were counting the cost of the budget with higher taxes, cuts in child benefit, cuts in mortgage interest relief on their negative equity homes, millionaire bankers who lent to them were all still sitting pretty in their jobs.

“They are counting the windfall gains they have just earned from the Government’s bailout. How can you call this fair?”