Child benefit cuts recommended

Mon, Oct 1, 2012, 01:00

Child benefit payments could be cut to about  €100 per child each month, according to a report compiled by an advisory group to the Minister for Social Protection.

The report recommends what it calls a "two-tier child benefit system" which would see a cut to the universal payment with top-up payments then made available to low income families.

The proposals to cut the payments were made by an advisory group on tax and social welfare set up by Minister for Social Protection Joan Burton in June 2011.

In a statement this afternoon, the Department of Social Protection said the aim of establishing the group was to harness expert opinion and experience. It also aimed to make cost-effective proposals for improving employment incentives and achieving better poverty outcomes, particularly child poverty outcomes.

The group began by prioritising the area of family and child income supports. The report of their examination of this issue is currently being considered by Ms Burton, the statement said.

“It is intended to publish this report in due course. The report is therefore not yet in the public domain,” the statement concluded.

Children’s Minister Frances Fitzgerald dismissed speculation that child benefits would be cut in the Budget.

She too insisted no decisions on child benefit had yet been made and that discussions in Cabinet were ongoing.

At present, child benefit is paid at €140 per child for the first two children, the third child receives €148, while €160 is paid for the fourth and subsequent children.

In last December’s budget, it was announced that child benefit for third and subsequent children was to be cut from as much as €177 to a flat rate of €140 a month over the next two years.

Minister for Public Expenditure Brendan Howlin said the standardisation of the rates of payments of child benefit would save €47 million this year and more than €70 million a year when it is fully implemented

In its latest report on Ireland, the IMF said maintaining expensive universal supports and subsidies at their current rates was “difficult to justify under present budgetary circumstances”.

It has proposed the means testing of child benefit.

Fianna Fáil spokesman on social protection Willie O'Dea this morning called on Joan Burton to clarify whether she is considering adopting the report's recommendations. 

"I find it incredible that a Labour minister, whose election campaign was based largely on a pledge to fight any reduction in child benefit, would even consider such a proposal," he said.

"A family with four children could see their payments cut by €160 a month, which could plunge already struggling families into more severe poverty. I don't see the sense in this at all and again this Government seems intent on targeting the most vulnerable in society. I would also question the legality of such a move, you could have two families with similar income levels receiving vastly different rates of child benefit, if these proposals are adopted."

Social Justice Ireland said the proposals were unjust, unnecessary and unacceptable.

Sean Healy, director of the independent non-Government organisation, said there were many alternatives to slashing the benefits, such as targeting the wealthy and investing in jobs.

“What is the Government proposing to do, take money away from the household of four and not touch the household of two? It seems to me that would be perverse,” said Dr Healy.

Additional reporting: PA

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