‘Tax raising measures’ would fund social welfare spending in SF budget

“Solidarity” taxes and additional employer PRSI hikes would fund the main measures in a €1 billion social welfare package published as part of Sinn Féin’s alternative budget process.

The party’s spokesperson on social protection, Claire Kerrane TD, said there would be a “number of tax raising measures, including a solidarity tax” outlined when Sinn Féin publishes its alternative budget plan this Thursday.

"We will show down to the red cent how everything will be paid for," she said. The centrepiece of the budget, an across-the-board increase to working-age social protection payments, has been costed by the Department of Social Protection at €434 million.

The party is arguing that the working-age payments should be set to the minimum essential standard of living (MESL), a metric devised from work done by the Vincentian Partnership for Social Justice.

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Ms Kerrane said the “political football” of a debate at budget time over increasing allocations to welfare rates should be stopped by benchmarking the rate of payment to the MESL. However, she denied that doing so would represent an open-ended commitment to spending more on the payments without an assessment of whether it was prudent to do so.

“From a fiscal point of view it’s very prudent because we’re protecting people from poverty first and foremost,” she said. “It needs to be evidence based, it’s not good enough to look at it and see what we can afford,” she said, adding that: “You have to make choices and we’ll make our choices in raising additional revenue from people who can afford it most.”

Sinn Féin says it would restore the right to a transitional State pension payment for those retiring at 65, at a cost of €127 million. Ms Kerrane said this would be funded by an increase of 2 per cent on employer PRSI on the proportion of salaries they pay over €100,000 per year, which would take in €128 million. She said that “down the line” PRSI increases for employees could be examined, but do so so now would be acting at “the worst possible time for workers”.

The party is also arguing that a basic payment rate of €203 per week is inadequate as a welfare payment and that Covid-19 showed this due to the decision to pay the Pandemic Unemployment Payment at a rate of €350 per week.

It is also arguing that State Payments pensions should be increased by €5 per week, costing €175 million. Measures targeting energy poverty include extending the fuel allowance season by two weeks and increasing the eligibility income threshold limits for fuel allowance by 10 per cent, costing a combined €51 million.

“Covid-19 has taught us lessons and Budget 2022 is the first chance to show that we have learned these lessons,” the party’s document argues. “We must now seize this opportunity to reform and revitalise our social welfare system for the better, to appropriately support the lives of workers, families, and households.”