Middle Ireland in line for triple top-up in economy recovery

Middle-income earners should benefit from a triple top-up in their pay package with a recovery surfacing in the economy, a senior minister has suggested.

Reductions in the universal service charge for middle-income earners were flagged last night, which it was claimed would boost consumer spending and inject cash into the economy.

Social Protection Minister Joan Burton said that the Government needed to look further at the USC to ensure “both low and middle-income workers share in the social dividend”. “Such a move would be socially just — enhancing the living standards of those on the lowest incomes.

“But it would also be economically sound, for a shared social dividend of this nature would provide a vital stimulus, boosting consumer spending and injecting money into the economy.”

A single person earning €35,000 annually currently pays €1,769 a year on USC, while someone on €55,000 pays €3,169.

The Government removed 330,000 low-paid workers from the USC net in 2012. The charge was originally introduced as a temporary tax by the last Government.

Ms Burton also said last night that businesses seeing profits return to healthy levels needed to recognise workers who took pay cuts in the crash.

“That solidarity in hard times needs to be recognised as the outlook improves.

“As employers see the benefits of the recovery, so too should their employees.

“I don’t think it’s unreasonable to say that companies which are prospering again should recognise the contributions of their employees and ensure that they, too, share in that prosperity.”

The deputy Labour leader’s comments are the clearest indication yet the Coalition is not just considering one but a range of reliefs for middle-income earners.

Fine Gael ministers have already said they are eager to reduce the burden on middle-income earners, particularly where the higher rate of tax kicks in at €32,800.

Ms Burton also backed this measure last night, saying the current rate acted as a barrier to people taking on more hours of work and better-paid roles.

Any flexibility to tweak tax rates will become clearer by the summer before ministers begin preparing for October’s budget.

Ms Burton’s comments come as parties this week discuss the third anniversary of the Programme for Government.

Most normal Dáil business has been set aside for ministers to make statements.

Fianna Fáil leader Micheál Martin said the whole week was a “farce” where three days would be spent “back slapping” the Government.

Sinn Féin’s Aengus Ó Snodaigh dismissed claims the Coalition had protected people since 2011.

Independent TD Richard Boyd Barrett claimed there was an emergency in the health service, in social housing, homelessness, and the numbers living in poverty.

Meanwhile, the Government launched its mid-term review yesterday, maintaining it would grow the economy by 2% this year, 2.5% next year, and by 3% by 2016. Enda Kenny said that the focus this year would be job creation.