All the money available for tax reductions in the Budget should be channelled into increases in personal allowances, the Combat Poverty Agency argues in a preBudget submission. "Increasing personal allowances is the fairest form of taxation reform, as it maximises benefit to low-income earners", it says. "Straightforward tax cuts proportionally benefit the better-off."
The agency, which is the Government's advisory body on alleviating poverty, says that tackling child poverty and getting people back to work - especially the long-term unemployed - should be priorities. It wants £280 million allocated to increased child benefits and health care.
It wants personal allowances for single people raised by £1,300 to £4,200 and by £2,600 to £8,400 for married couples.
It recommends an increase in PRSI personal allowances from £80 to £100, at a cost of £40 million, but says that there should be no further cuts in the rate of PRSI.
The agency recommends fighting child poverty with a flat-rate child benefit increase of £7 per child, extending the higher child benefit rate to the second child and introducing two additional payments per year.
