Parents 'get more in benefits than they pay in taxes'
Published 13/04/2016 | 02:30
A worker earning around the average wage, with two children, gets more in benefits than he or she pays in work-related taxes, a global economic think-tank has claimed.
Once child benefit and other tax provisions are factored in, a worker with two children, on the average wage, takes home 100.3pc of his or her gross wage, according to the Organisation for Economic Cooperation and Development (OECD).
The CSO estimates the average wage at around €36,000.
"Taking into account child related benefits and tax provisions, the employee net average tax rate for an average married worker with two children in Ireland was actually negative at -0.3pc in 2015, which is the lowest in the OECD, and compares with a reduction of to 14.6pc for the OECD average," the OECD tax report said.
"This means that an average married worker with two children in Ireland had take home pay, after tax and family benefits, of 100.3pc of their gross wage compared to 85.4pc for the OECD average."
The Paris-based organisation said that, after tax and benefits, an average single worker takes home just over 80pc of his or her gross wage. The OECD said the data includes PRSI contributions made by workers and the Universal Social Charge.
But other taxes faced by families, including property taxes and water charges, are excluded. Economist Micheál Collins, senior research officer at the Nevin Economic Research Institute (NERI), said people were generally surprised at how low the income tax was in Ireland compared to other countries.
"The OECD charts are a useful insight into these comparisons and have, over the years, consistently shown how low the proportion of income paid in tax is for almost all Irish earners," Mr Collins said.
Mr Collins said that for a couple with one PAYE income and two children, where the earner gets €30,000 per year, he or she will pay €3,193 in taxes and social insurance after taking account of tax credits. In addition, they will receive €140 per month in child benefit for each child, making a total of €3,360 per year.