The Budget’s mixture of permanent and once-off items conferred greater benefits on lower-income sections of the population, according to the Economic and Social Research Institute (ESRI). As the tax package was aimed more at middle income earners, this indicates that the additional spending measures benefited the lower earners as they were worth more as a proportion of their income.
Most sections of the population, including those reliant on welfare payments, should see incomes rising ahead of inflation over the next year. However, this follows a couple of years when welfare payments were below inflation, leaving recipients reliant on once-off payments for support. While the additional once-off measures this year will again help, there is also a need to rebuild permanent rates over the next year or two.
A strategic approach is also needed to particular areas of need, such as lone parents and child poverty. A new section in the Department of Taoiseach has been established to oversee measures to address child poverty. And a range of useful measures were announced in the budget by spending minister Paschal Donohoe.
These included an increase in the qualifying child payment made to those on welfare, an extension of the schools hot meals scheme and the inclusion of 18-year olds in education for child benefit payments. In addition, once-off payments were made for child benefit, and the working family payment, where eligibility has also been widened, while cuts to school transport costs have been extended.
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There are welcome measures. But more will be needed. Temporary payments give an income boost, but only a once-off one. The increase in the qualifying child benefit is welcome, but work by the ESRI has proposed that this be merged in with a wider, second level of child benefit payment. An alternative route might be increases in the permanent level of working family payments, catching the group who do not qualify for welfare but are on low incomes. But part of the problem is that the current system is too complex and reforming it is probably an important step to tackling child poverty.
Budget day measures are only part of the agenda of tackling child poverty, but they are important. As resources tighten in the years ahead, budgetary largesse may well have to be trimmed back. It is vital that tackling child poverty does not slip down the agenda.
This will not be cheap. The ESRI put the price tag on its second child benefit at closet to ¤700 million. But nor is it unaffordable. The State plans to spend ¤900 million on energy payments to households rich and poor as part of the budget. While the energy credits comprise three once-off payments, it nonetheless illustrates that this is really all about political and societal choices.