Friday 17 October 2008

Union seek €11 per hour threshold for income levy

Mandate trade union has written to the Minister for Finance, Brian Lenihan to request the exclusion of those on low incomes from the new income levy. The union claims that the levy will push those at risk of poverty further into financial crisis.

In their letter to the Minister, Mandate requests that “a threshold is introduced as a matter of urgency to protect low paid workers and their families from the imminent threat of poverty and social exclusion. In this regard, an appropriate threshold would be to exclude those earning below €22,308 per year or €11 per hour from paying the one percent income levy.”

General Secretary of Mandate trade union John Douglas said, “The Minister was a major player in the recent discussions on a national wage deal. At those talks it was established that people earning below €11 per hour would receive an extra half a percent increase in their income because there was acceptance from all parties, including Government and the employer’s bodies, that these were the members of society who needed protection most in the current economic climate.

“This budget has shown total disregard for the hard work and difficult negotiations that took place in Government buildings less than two months ago and unless the Minister introduces an income threshold which excludes those on the lowest wages from paying the levy it will undermine the Governments own position during the wage negotiations.

Mandate say that the one percent income levy is an unfair imposition on low paid workers at a time when inflation amongst essential items has been running at a high level for most of the year with little or no compensation for workers.

“At a time when a third of all households at risk of poverty are headed by a person with a job, to impose a one percent levy on the income of these families is morally unacceptable and a sad indictment of the Government of today.

“How can the Minister and members of Government claim that this is an equitable budget when low paid workers are having to pay a one percent levy on their earnings while Government still allows high earners to claim up to 41 percent of their private pension contributions back in tax refunds? Low earners, who were already out of the tax net before the budget, still cannot claim any tax refunds from pensions, healthcare or indeed trade union contributions because this new tax is a levy.