Childcare allowance faces chop as other benefits to be means-tested
THE early childcare allowance will be scrapped at the end of this year and child benefit will be means-tested or taxed under the next Budget.
Finance Minister Brian Lenihan signalled that the long-standing child benefit may change under the next Budget as the Government moves to generate an additional €1.75bn from taxation in 2010 and €1.5bn in 2011.
Taxing the benefit could yield the Government upwards of €500m, the Minister for Social and Family Affairs Mary Hanafin hinted last night.
The early childcare supplement of some €1,000 per year, which was only introduced in 2006 at the height of the boom and cost the State €480m last year, will be abandoned at the end of this year.
In the meantime, it will be halved to €41.50 per month from the start of next month. This represents a fall from €1,000 to €500 annually.
Families are also set to suffer a reduction in their child benefit, which is worth €166 a month for each of the first two children, when it is either means-tested or taxed.
Minister for Social and Family Affairs Mary Hanafin said it was "too complex" to means-test or tax the benefit at this point but it was being examined by the Commission on Taxation.
From January next, the early childcare supplement will be replaced by a free early childcare and education scheme which will be made available to some 70,000 children between the ages of three years and three months and four years and six months.
A capitation grant will be paid to those who provide free pre-school services.
Scheme
Some €170m will be designated for the new scheme, comp- ared to the €480m which was spent on the early childcare allowance.
"Pre-primary education significantly enhances the subsequent educational achievement of students and in turn increases the return for state investment in education generally," Mr Lenihan said.
Although welcoming of the new scheme, the Irish Childcare Policy Network expressed some concern that the budget allocated for the pre-school year only amounts to a third of that currently allocated to the early childcare supplement.
Director Ciairin de Buis said it is important that Irish children don't get a "second-rate service".
She added: "Savings made should be reinvested in early childhood care and education for all young children. Early childcare education cannot be seen simply as a cost-saving measure.
"Young families will be down substantial amounts of money but if they can be assured that their children will have access to good quality childhood care and education the impact may be lessened."
Barnardos, which has long campaigned for a free pre-school scheme, said research had shown that investment in early years education is a cost-effective use of resources and has well-proven benefits to society and children, parti-cularly those who are disadvantaged.
The Children's Rights Alliance said the scheme was the best way of providing for children's development, for their education and their well-being.
- ine Kerr Political Correspondent
