Measure will allow wealthy to hand back child benefit
WEALTHY PARENTS will be able to hand back the €140-a-month child benefit payment to the State if they wish, under new measures being drawn up by Government officials.
Child benefit is a universal welfare payment paid to all families with children, regardless of their financial circumstances.
Some well-off parents have commented in recent months that there is no way to opt out of child benefit payments, which are paid automatically to some 600,000 families every month. They cost the State about €2 billion a year.
However, Minister for Social Protection Joan Burton has asked officials to make whatever technical changes are required in order for parents to be able to refuse the payment.
In a department briefing drawn up in June of this year, senior officials stated that work was ongoing on preparing a formal way for parents to either refuse the benefit or to return it to the exchequer on a voluntary basis.
Ms Burton is under mounting pressure to find ways of reducing social welfare expenditure, and has been examining plans to either means-test or tax child benefit.
She has signalled support for a tax on child benefit for people who earn more than €100,000 a year, but said last month that it could take several years before it is introduced.
This is because the Revenue Commissioners and the Department of Social Protection use different computer systems.
So, for example, the latest Revenue figures show there are almost 115,000 people earning more than €100,000.
However, there is no record of how many of these people receive child benefit payments.
Ms Burton has said means-testing 600,000 families would use up significant resources and time in terms of administration.
Separately, unpublished briefing material shows that Government officials have also drawn up proposals for a new form of child benefit payment targeted at low-income families.
The Department of Social Protection has prepared a detailed technical report on an “integrated” welfare payment, which would combine the family income supplement and child dependant allowance.
This follows a value-for-money review of child benefit, which highlighted the need to “rationalise” the current system of child income support payments and provide “more consistent” assistance to low-income families.
If the Government opts to cut or tax child benefit payments in future budgets, this new form of welfare payment could be used to help compensate families on welfare or low incomes.
The new child benefit would combine the qualified child payment – formerly known as the child dependant allowance – paid to parents reliant on welfare, and the family income supplement, paid to working families on low incomes.
A technical report detailing how this could be done was used by a special advisory group on tax and social welfare, which reported to Ms Burton earlier this year.
There have been long-standing plans to introduced a so-called second-tier child benefit payment. To date, though, there has been little sign of progress.
Latest poverty figures show the number of children living in consistent poverty, or at risk of poverty, is on the increase. This is likely to put more pressure on the Government to take action.
Ms Burton has said that no decisions have been made in relation to budgetary matters relating to child benefit or other welfare payments.
These are certain to be the focus of detailed discussion at Cabinet in the autumn.