Friday 24 November 2017

Fine Gael backbench jitters over child cash cut plans

The campaign is designed to establish the level of fraud in the €2bn child benefit bill.
The campaign is designed to establish the level of fraud in the €2bn child benefit bill.

Michael Brennan Deputy Political Editor

FINE Gael faces a backbench revolt over middle class families taking the brunt of child benefit cuts.

A growing number of TDs have come out to publicly air their concerns.

They are alarmed over Social Protection Minister Joan Burton's plan to impose a flat rate cut of up to €40-a-month on child benefit payments.

Top-up payments would be given, but only to poorer families on social welfare and in very low income jobs.

Now Fine Gael backbenchers fear that middle class families, who are already struggling with mortgage repayments and reduced incomes, will be badly hit.

Seven backbenchers chose to publicly voice their worry at the weekend – there are several others keeping their concerns private.

Fine Gael Kildare South TD Martin Heydon was among those who went public and said middle class families needed a break.

“They are the people who are driving the economy, and the burden is falling on fewer shoulders to generate the tax.”

He said he was becoming concerned about the “disincentive to work” as the two-tier child benefit system would offer top-ups to those on the dole.

Fine Gael Meath East TD Regina Doherty also argued strongly against the plan to introduce a two-tier child payment system.

"We're going to have a Children's Referendum so that children can be treated equally -- then a couple of weeks later, we're not going to treat them equally? No way," she said.

Ms Burton's advisory group has recommended a flat rate cut of €40 to bring the standard monthly child benefit payment down to €100.

Although the final decision will be made by cabinet, a cut of this size is considered unlikely because it would be so politically explosive.

But Fine Gael backbenchers are aware that the more important decision will perhaps be on who qualifies for the top-up payments after the flat rate cut.

They are now lobbying to see the bar being set high enough so that struggling middle class families are included in top-ups.

Fine Gael Mayo TD Michelle Mulherin claimed some middle class families had the "outward trappings of wealth" but were privately struggling to pay their bills due to huge debts.

"As much as possible, you don't muzzle a thrashing horse. When a horse was thrashing and saving the crop, it was allowed to eat a little of the crop. The people who are working are paying into our system through social insurance," she said.

Fine Gael Cavan-Monaghan TD Heather Humphreys said child benefit was now a crucial part of income for middle class families.

"For some, it's helping to pay the mortgage to keep the roof over their heads. I think we really have to take it into consideration, we really do," she said.

But recent information supplied by officials from Ms Burton's department indicates that the top-up payments would most likely go to social welfare and low-income families.

At present, 49pc of the 1.1 million children getting benefit receive additional social welfare payments.

Department of Social Protection official John Bohan told a Dail committee recently that bringing in "selective payments" for child benefit would not necessarily be more expensive to administer.

Complicated

Although Ms Burton has made no public comment, the Irish Independent understands that she sees the new two-tier payment system as the only way of reducing the annual €2bn child benefit bill without severely impacting on families on social welfare or in low-income jobs. She is under pressure to cut €540m from the €20.5bn social welfare budget.

But Ms Burton's department is pursuing the two-tier payment system because it has ruled out means testing as too expensive and complicated.

The standard rate of child benefit has already been cut twice in previous Budgets -- down from €166 to €140.

The rate for the third child is €148 and €160 for a fourth.

But it has already been announced that these rates will be reduced to at least the €140 standard rate in December.

Irish Independent

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