Saturday 25 November 2017

Two-tier child benefit 'within 18 months'

Paul Melia

Paul Melia

PARENTS could be hit with lower child benefit payments in as little as 18 months, according to the Department of Social Protection.

Civil servants are working on plans to implement a two-tier system aimed at saving up to €200m a year, which will hit middle-income families hardest.

While there are doubts about whether the Government will implement proposals that would give each family a basic payment, with a top-up for families on low incomes, senior civil servants told a Dail committee yesterday they were ready to make changes if required.

Assistant secretary Teresa Leonard said the Department of Social Protection would be able to "react quickly" if the Government goes ahead with the controversial plans.

The cost of providing child benefit payments has risen by €2.6bn over an eight-year period due to generous increases introduced by previous governments. Most of the increase was caused by hikes in child benefit payments, the committee heard. In 2000, the first two children got £42.50 each (€54) and each child after £56 (€71). The rates today are €130 for the first three children, rising to €140 thereafter – a hike in the basic rates of 240pc.

A report into child benefit, published last month, said the payment could be taxed, resulting in savings of up to €345m, or a two-tier payment system could be introduced, where each family would get a basic payment, with a top-up for families on low incomes.

Ms Leonard said while no decision had been taken on reforms to the system, it would take up to 18 months to implement the changes.

Irish Independent

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