Second means-tested rate of child benefit being considered - Taoiseach

The Government is considering introducing a means-tested second tier of child benefit, Taoiseach Leo Varadkar has said.

However, Mr Varadkar told the Seanad on Thursday morning that such a change would not be possible to implement in 2024.

The Fine Gael leader said he has asked the Minister for Social Protection Heather Humphreys to examine an Economic and Social Research Institute (ESRI) proposal to introduce a means tested second tier of child benefit.

“Such a change would not be possible to introduce in 2024, so further work will have to be undertaken to ensure no unintended consequences occur as identified by the ESRI itself,” he said.

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“But the proposal has real merit and I look forward to understanding more about how it might be implemented.”

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Mr Varadkar added that while the specifics of other issues would be decided on Budget day, Government departments were working towards “a shared goal of improving child welfare”.

The ESRI report, published earlier this month, found a new means-tested tier of child benefit could take more than 40,000 children out of poverty. Such a reform would provide for all households with children to receive a payment determined by their means and number of children.

The ESRI has estimated that introducing the payment would cost about €700 million per year. The report said a second tier of child benefit would be “far more effective” at reducing child poverty than similarly costed increases in universal child benefit or means-tested increases for qualifying children, which the ESRI said would reduce child poverty by less than half as much.

Mr Varadkar said the upcoming Budget on October 10th would be a “critical moment” for the Government and that he wanted to ensure child poverty and wellbeing were a strong theme in it.

He said that “like last year”, the Budget would “put money back in people’s pockets and also ensure that the money that they do have goes further”.

“Some people argue that we must choose between saving or spending the budget surplus, increasing spending or decreasing taxes. The truth is you can do all of these things if you have a growing economy,” he said.

“The choice rather is one of quantum and split but we must never take for granted or economic success or assume that full employment, record levels of trade investment and budgets in surplus will persist no matter what economic policies we pursue. Wealth and jobs have to be generated and that requires the protection of an economic model that has served us well.”

Mr Varadkar added that a change of economic, trade or tax policy, “or our policy on the European Union” would “almost certainly be a change for the worse for our country”.