Burton to consider child benefit tax levies for €100,000 earners

SEANAD:PROPOSALS THAT could see tax levied on child benefit for those earning more than €100,000 a year have "merit", Minister for Social Protection Joan Burton has said.

During a Seanad debate on the Social Welfare Bill, Ms Burton said that a paper issued by the Institute of Taxation before the budget might be a way of dealing with the issue of taking child benefit from those who did not need it.

The institute had proposed that everybody earning a certain threshold, she suggested €100,000, should have to file a tax return to allow for the taxation of children’s allowance.

She also said a proposal to deal with the issue through refundable tax credits, as suggested by Fr Seán Healy, was a more attractive way of dealing with the issue than straightforward taxation.

She warned that means testing would acquire an “army of means-testers” and experience with student grants showed that it was cumbersome and subject to appeal.

During the debate Ms Burton clashed with David Cullinane (Sinn Féin) who interrupted her speech. She was “amazed” that Sinn Féin had opposed a cut in the child benefit paid to the third child when child benefit was still far in excess of what it is in Northern Ireland.

She said child benefit was €67.70 for a second child or more in Northern Ireland whereas a parent with a third child in the Republic would still be paid €148 and €160 for the fourth child even after recent cuts.

That meant a child in Dundalk would still be receiving a lot more in benefits than a mother from Newry, she said.

Mr Cullinane said the Minister knew child benefit rates were set in Westminster. He said she should pick up the phone to British prime minister David Cameron if she felt strongly about the difference in rates between the two jurisdictions. Sinn Féin had lobbied about the disparity “every single day of the week”.

David Norris (Ind) said the reference to the disparity between the Republic and the North was a “red herring” as the Minister knew “bloody well” that the Assembly government, which Sinn Féin was a part of, did not set the rate.

Leader of the Seanad Senator Maurice Cummins (Fine Gael) said “the vast majority of fair-minded” people would be in favour of children’s allowances being abolished for any household earning more than €100,000 a year.

“If we can’t means-test social welfare, we should cut it completely, in my opinion, for families and households that have an income of over €100,000 a year.”

Ms Burton warned there was a lot of complications constitutionally in dealing with the issue.

She said she would return to the Seanad in March after the advisory group set up to look into the issue of child benefit reported to her early next year.