Major cuts to child benefit expected
The Government is set to press ahead with cuts in child benefit rates despite strong protests from Opposition politicians and social justice groups.
A proposal for a two-tiered system of child benefit, with a flat rate and top-ups for low-income families, will be considered by the Cabinet shortly.
Minister for Agriculture Simon Coveney said this morning that cuts to child benefit had not yet been discussed at Cabinet, but it was something the Government would have to consider in the run up to the budget.
Mr Coveney said it was his personal view that some families needed the money more than others, and that’s where spending should be concentrated.
“Last year a lot of people rightly raised the issue that is it fair that very high income earners are getting the same supports through child benefit as people who are on low incomes are getting,” he said.
“At a time when you have to try to prioritise spending for families and parents and children who need financial support the most, it is something we need to consider.”
There has been mixed reaction among Labour backbenchers. One TD, Kevin Humphreys, argued that wealthy people with children did not need the same financial supports as poorer families. But his colleague, Joanna Tuffy, voiced concern about the impact of cuts on middle-income families who are under pressure.
Child benefit is a universal welfare payment to all families with children, regardless of their financial circumstances. The monthly payment is €140 for each of the first two children, €148 for the third child and €160 for each subsequent child. It is paid to 600,000 households and costs the State €2 billion a year.
Minister for Social Protection Joan Burton has received an expert group’s report on child and family income supports which proposes restructuring the payment during a “transition period”. The level of core payment has not been decided and the current rate could be reduced over a number of years rather than in one budgetary cycle.
The report from the advisory group on tax and social welfare suggests retaining the payment’s universal nature while introducing an element of “redistribution”. Some savings obtained from not paying more than a flat rate to wealthier families could go towards topping up payments to less well-off families, while other savings would be returned to the exchequer.
The report had been expected to be brought to Cabinet in November but may now go before Government sooner.
Opposition parties and campaigning organisations criticised the proposal, but Labour’s Mr Humphreys said a mechanism to curb the level of payment to high earners must be developed because financial resources were scarce.
“It’s an emotional subject but that doesn’t mean we must stay away from it. We’ve scarce resources and do we really want to see money being paid to wealthy families? The resources we have must be targeted at people who are hardest pressed at the moment,” he said.
Fianna Fáil spokesman on social protection Willie O’Dea described the proposal as unfair at a time when families were facing into a tough budget and were preparing to pay property tax and water charges. “The squeezed middle and lower income groups were never more squeezed. It seems to me outrageous,” he said.
Ms Burton’s spokeswoman said the Minister had set up the advisory group “to harness expert opinion and experience” to make cost-effective proposals for “achieving better poverty outcomes, particularly child poverty outcomes”.
The spokeswoman said the group had prioritised the area of family and child income supports and its report was being considered by Ms Burton.
“It is intended to publish this report in due course. The report is therefore not yet in the public domain,” she added.
Ms Tuffy voiced concern about the impact of the proposal on under-pressure middle-income families.
“It’s not just people on low incomes that need child benefit when they have families. People on middle incomes need assistance. They have mortgages and lots of outgoings,” she said.
Social Justice Ireland said child benefit rates should not be touched in the budget, when the organisation published its budget proposals yesterday. Director Fr Seán Healy said a cut would be “anti-child and anti-family”.
Director of the National Women’s Council of Ireland Orla O’Connor emphasised the cost of childcare and said child benefit had become an essential part of the household budget for many families. In last December’s budget, it was announced that child benefit for third and subsequent children was to be cut to €140 a month over the next two years.