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Taxing Issue

Does the tax system affect women and men differently?

Yes, but not by design.

SINGLE WOMEN AND single men have lost the same amount through tax changes, but in opposite-sex couples, women tend to lose more of their disposable income.

That is the finding of a new study published by the ESRI today. The institute’s new Microsimulation Method for Equality Analysis (MMEA) uses their tax benefit model to assess the impacts of policy change on men and women.

While the tax system is not allowed discriminate on the basis of gender, the study, carried out in conjunction with the Equality Authority, examines how the budgets from 2009 to 2013 affected people.

The study finds that for single women and men, the impacts of austerity policies – including public-sector pay cuts as well as tax and welfare changes – were broadly similar, with average losses in disposable income of close to 10%.

Couples lost, on average, 12% of their disposable income while retired couples lost just over 4%.

Within couples, women saw sharper losses in individual disposable income than men at all income levels – about 14% for women in couples as against 9% for men.

A key driver of this difference, the report says, was the reduction in Child Benefit, typically received by mothers.

Public-sector pay changes and social welfare reductions also had a stronger effect on women than men.

Dr. Claire Keane of the ESRI says that the differences were more keenly felt by lower-income couples.

“Policy changes have imposed similar income losses on single women and single men. Within couples, however, losses have been sharper for women than men, especially for poorer income groups. If couples share their income fully this may have limited impact; but otherwise the greater losses for women in couples may have an effect on bargaining power and welfare within couples.”

Orlagh O’Farrell of he Irish Human Rights and Equality Commission says that the research shows a need to “gender-proof” the Budget.

Read: With 12 days until the Budget, here’s how the numbers are shaping up

Read: ‘Don’t try to choke off the recovery with more austerity’

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