House-charge database to help tax child benefit
THE Government is moving towards taxing child benefit with the help of the Big Brother database being put together to collect the property tax.
On top of the €10 cut in child benefit in the Budget, a tax on the benefit is on the agenda as the Government seeks to make future savings.
Figures from the Department of Finance show anything up to €400m could be saved by taxing the benefit.
Taxing child benefit, instead of a straight cut to the rate, would also protect those on low incomes.
But problems around identifying who receives the benefit, their tax credits and the issue of unmarried couples would also have to be addressed.
Social Protection Minister Joan Burton has frequently expressed a preference for taxing child benefit, but has explained there are difficulties.
She is due to publish an expert group report in the New Year, which sets out the various options for the Government on child benefit, including a cut, taxing or means testing.
Ms Burton has been criticised by fellow ministers for the slow progress on delivering a way to means-test or tax child benefit.
But ministers believe the Revenue Commissioners' development of the property tax database – the most comprehensive of its type – will speed up the process.
"As a result of the property tax, I would hope that within a short time, we would have the development of capacity in relation to child benefit to allow taxing or means-testing," a Cabinet minister told the Irish Independent.
"You would still maintain it as a universal payment. There'd be a lot of administration involved. The level of IT and interactivity is not as strong as it could be," the minister added.
As well as containing details on every homeowner in the country, the property tax database will see advances in the information technology capabilities of government and state agencies.
When it is up and running, the property tax database will contain details on:
• The address of the home;
• Value of the home;
• Unique ID for the home;
• Name of the homeowner;
• Name of their spouse or civil partner;
• The homeowner's personal public service number
• The homeowner's postal address;
• The name of the council area where the home is situated;
• Any other details that are needed.
The cut of €10 to child benefit in Budget 2013 saved €136m, whereas taxing child benefit would bring in up to €395m – depending on what level the Government decided to tax the payment.