Primary Income is income from production (sales of goods and services), from capital investment (interest on loans, dividends on shares, and similar income), and from labour (wages and other benefits). It also includes taxes (and subsidies) the government receives (or pays) on products and production. In National Accounts, the primary income for the country as a whole is called the Gross National Income, and for the separate Institutional Sectors, it is called the Balance of Primary Incomes.
Secondary distribution is the redistribution of Primary Income through Taxes on income and wealth, Social Transfers and Other Transfers.
Taxes on income and wealth are things like Pay as You Earn (PAYE), self-employed income tax and the Universal Social Charge, which are all taxes on households, and corporation tax on companies’ profits.
Social Transfers are contributions into pensions and social insurance schemes, such as Pay Related Social Insurance (PRSI), and payments out of these schemes, such as pension payments to retirees and Child Benefit paid to parents.
Other Transfers is a catch-all term for transfers that includes insurance claims, Government EU contributions and donations to charity.
Many secondary transfers are aimed at correcting social inequalities, for instance by taxing wealth and providing social protection.
The inflows and outflows of secondary distribution between Ireland and the rest of the world correspond to the Secondary Income in the Balance of Payments Current Account.
