independent

Friday 18 April 2014

Warning over child benefit reforms

Anti-poverty campaigners called for a rethink of child benefit cap proposals

Proposed new child benefits capping payments for the better off would worsen the lives of struggling families, a leading anti-poverty group has warned.

The Society of St Vincent de Paul (SVP) has rejected a two-tier system to limit automatic top-ups to those on social welfare or for families with incomes up to 25,000 euro. The group is also unhappy that the universal rate would be cut from 130 euro to 110 euro per child per month, on the back of other welfare cuts since 2009.

"25,000 euro is a low level of income for a family. We're not saying the idea should be thrown out immediately but let's look at the changes and how they impact," Caroline Fahey, of the SVP, said.

"The threshold is the issue, maybe it should be increased to the average industrial wage, around 35-40,000 euro. The state cuts to child benefit have already been hugely damaging to families in need."

Under the child benefit review families will only qualify for the maximum top-up if they earn less than 25,000 euro.

Every family would get 110 euro a month per child, down 20 euro on current rates, with top-ups for poorer families as high as 38 euro a week - this second tier would taper according to how much a family earns over the 25,000 euro threshold. Payments would run in brackets with basic rates kicking in when incomes hit 34,935 euro for a one-child family; 44,870 euro for a two-children family; and 54,805 euro for three.

The review found it is possible to tax child benefit but opted for a two-tier system instead because it offers a deeper reform of the benefit. The proposals would save the state 200 million euro a year.

Tanya Ward, chief executive of the Children's Rights Alliance, said the money from any savings should be reinvested in national childcare. She said "Maintaining the universality of the payment is critical and introducing a top-up for families on low income is essential to address child poverty. However, every time the Government has cut child benefit, much of it has been lost to children and families. Any proposals for reform must reinvest the funds in a fit-for-purpose national childcare system."

Taoiseach Enda Kenny said: "The advisory group were very clear on one fundamental issue and that was the importance of the universal payment. The universal payment is fundamental."

Orla O'Connor, National Women's Council of Ireland (NWCI) director, backed calls for savings to be reinvested. And the group called for child benefit to be 60% universal. Ann Irwin, policy officer with the NWCI, hit out at the tapered top-up plan. "What we need to be doing is supporting movement to employment rather than penalising it," she said.

Press Association

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