Saturday 25 October 2014

Families faced with ‘impossible decisions’ after tax, child benefit changes

Brian Hutton

Published 05/12/2012 | 17:46

EXPECTANT mothers and young families were dealt a double whammy in the latest austerity Budget.

Welfare payments for pregnant women will now be taxed, heaping further financial pain on parents-to-be alongside predicted cuts to child benefits.

Finance minister Michael Noonan said Maternity Benefit would be treated as taxable income from July next year.

Outlining the new measure, Mr Noonan said it would "correct an anomaly" so pregnant women would pay the same amount of income tax as when they were working.

The payments would continue to be exempt from the universal social charge.

As expected, child benefits are to be cut by €10 a month.

Public expenditure and reform minister Brendan Howlin said the move would save the Government €136 million next year.

"We are conscious of the impact that this will have on many households," he added.

Mr Howlin said there would be additional supports specifically targeting low-income households as a result of the cutbacks hitting parents and children.

These included a €14 million funding package to increase the number of childcare places available to low income workers.

There would also be €2.5 million set aside to "further enhance" early-childcare and education supports for children in a number of very disadvantaged areas, Mr Howlin said.

But Orla O'Connor, director of the National Women's Council, said cuts targeting mothers and children would drive families into poverty.

"More families will have to make impossible decisions between offering a healthy and warm meal for their children or going to the doctor with their sick child," she said.

"The current system is not perfect but without real welfare reform, vital payments such as child benefit have been the safeguard that kept many families out of poverty."

Ms O'Connor said it was already clear that the proposed childcare schemes for low income workers would not compensate for the cuts.

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