The Green Party has called on Minister for Finance Brian Lenihan to consider a proposal to introduce refundable tax credits for people on low incomes in the next Budget.
Speaking after attending the launch of a new costing document from Social Justice Ireland on refunding credits, the party's finance spokesman Senator Dan Boyle said the move would increase protection for those experiencing financial difficulties.
According to the proposal put forward by Social Justice Ireland, almost 113,300 low-income individuals would directly benefit from a refundable tax credits scheme. When children and other adults in a household are taken into consideration, the total number of beneficiaries could be as much as 240,000, the organisation estimates.
Social Justice Ireland called for the unused portion of personal and PAYE credits to be refunded to those who have not earned enough to have paid tax in a given year. It said that when an individual's income is insufficient to use up all his or her tax credits, the remaining credit could be paid to the individual by means of a cash transfer.
The organisation claimed that such a move would help those on low incomes who do not usually gain from increased tax benefits in budgets.
The proposal was backed by Mr Boyle, who urged the Minister for Finance to give it proper consideration. "In a budget where many further difficult decisions have to be made, advances must also be progressed in protecting the poor in society," he said.
At the publication of the costing document this morning, Social Justice Ireland director Fr Seán Healy said the proposal would not only make the tax system fairer but would also greatly assist the working poor.
"Whether the Government takes this proposal onboard is dependent on whether they think the whole issue of the working poor, is an issue worth addressing," he said. "Those on low incomes should be protected and given incentives to ensure they stay in their jobs and this is a simple way of doing this."
Social Justice Ireland said its proposal would cost the Exchequer about €140 million. This figure varies considerably from a €3 billion estimate provided by the Department of Finance to the Oireachtas Committee on Social and Family Affairs last year.
Commenting on the discrepancy, Fr Healy said Social Justice Ireland's costing document, which was conducted by Robert Ryan and Dr Micheál Collins from the Department of Economics, Trinity College, Dublin, "raised serious concerns" about the Department of Finance's calculations.
"The costings supplied by the Department of Finance were wrong by more than 95 per cent. The figures they provided are totally incredible," he said.
"The department has been challenged on this particular issue many times, and one would have expected them to have had accurate figures to hand. If they haven't got their sums right here then it raises questions as to whether other estimates they've supplied are incorrect,” he added.
A spokesman for the Department said the figures provided to the Oireachtas Committee last year were collated by the Department and the Revenue Commissioners. He said that at that time, Fr Healy was suggesting a more limited refundable tax credit and was unable to provide costings.
"Full consideration will be given to the proposal for refundable tax credits. However, the Commission on Taxation gave this proposal full consideration last year, and it did not recommend that it be introduced," the spokesman said.
