Fionnan Sheahan

Thursday 10 July 2014

Fionnan Sheehan: Benefits should favour those in greatest need

Published 27/12/2013|02:30

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Well, you wouldn't start here. If you were designing a system of financial support for parents in raising their children, you wouldn't start out with a universal payment to all, regardless of their income.

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Taking on board the State's obligation to assist in the cost of raising children from a societal perspective, there's a strong argument for a basic payment for all.

After that, the ideal scenario would be a weighted system where those in greatest need of financial support would receive it, with the payment still generous for those on low and middle incomes.

A means-testing element would ensure those on high incomes don't get the top-up.

Easier said than done.

The report of the expert group on child payment supports, the Mangan Report, said child benefit should remain a universal payment and left Government with two options -- taxation, or a two-tier payment with a top-up for families on low incomes.

Either version would have involved means-testing.

After controversially sitting on the report for 12 months, the period where the child benefit budget was under most scrutiny, Social Protection Minister Joan Burton then kicked the recommendations down the road.

As it happens, the Department of Social Protection has now the capacity to means-test child benefit, but it would take 18 months to set up.

The age-old problem of whose income to measure when the parents are not married would have to be tackled and the 300,000 families' incomes not already on the social welfare system would have to be measured.

The capacity is there to do it, but not the political will.

The pressure to cut child benefit has abated to a degree, with the end of the bailout.

After breaking their commitment to protect child benefit, with the €10 reduction in Budget 2013, the Labour Party is in no mood to cut it further.

But Fine Gael is pushing for further reforms to eliminate disincentives to unemployed workers taking up a job.

Next year, a new report on the advisory group on tax and social welfare will be finished.

The Government won't be shelving it this time.

Irish Independent

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