A study carried out by Social Justice Ireland has revealed that a radical reform of the tax credit system in Ireland, to make tax credits refundable to the working poor, would cost a snip of the miscalculated estimates produced by the Department of Finance.
The proposal from Social Justice Ireland 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; with an estimated 240,000 low-income individuals set to benefit from the reform.
Worryingly, the Department of Finance placed an estimated cost for the implementation of this reform at Eur3billion, however the same study carried out by Social Justice Ireland produced a significantly lower figure at just Eur140 million – less than 5 per cent of the Department of Justice’s estimate.
Dr. Healy, of Social Justice Ireland, has urged the Government to adopt the new tax system which would see low-income workers receive money directly from the Revenue, if their annual salary is too low for them to claim for some tax credits. An example from the study showed a single person earning less than Ђ18,300 could be in line for a cash payout as they are not earning enough to claim all tax credits. Payments could total Ђ800-Ђ1,000 per individual, and will make a huge difference to those in lower income brackets.
Dr. Healy is to detail his figures at a submission to the Oireachtas Joint Committee on Social Protection, and will contest the original costings provided to them by the Department of Finance; which were wrong by more than 95 per cent. A meeting is also planned with the top officials in the Department of Finance in the coming weeks.
To view the full version of the report on tax system reform produced by Social Justice Ireland, click here.