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Child benefit cut could start this year

A FRESH round of cuts to the child benefit payments could be phased in from this year, Minister Joan Burton has said.

SHE will now take some time to consider whether a two-tier system or taxing child benefit would be better.

It was suggested today that the overhaul of the universal payment could be shelved for two years but a spokesperson for Ms Burton said changes would happen much quicker.

Depending on what direction the minister takes, middle-income families could lose at least €22, and possibly €53, a month.

The report, compiled by officials at the Department of Social Protection, will be studied over the coming months and a decision taken by the next budget.

The department told the Herald today that Ms Burton has pointed out the changes could be phased in over a number of years, with the system reformed over time.

There has been no Government decision on it yet, the spokesman said.

The report has to go to the Oireachtas Committee on Education and Social Protection, with its chairman, Ita Mangan, appearing before the committee.


Ms Burton has said she wants a public debate on the issue and this would happen over a relatively short period. She also said the changes could start being phased in this year.

"It might not necessarily be done in one fell swoop," the spokesman said.

Ms Burton commissioned the expert report, which put taxing of child benefit on the table for the first time.

She brought it to Cabinet on Tuesday, but no decision was taken.

It said child benefit should remain a universal payment and gives the Government two options: taxation of the benefit which would save up to €345m or a two-tier payment with a top-up for families on low incomes.

The minister is said to be indicating a preference for a top-up child benefit system.

A two-tier child benefit payment, with extra money for low -income families, would take at least 18 months to implement – far longer than taxing child benefit.

The report says the two tier model would be "preferable".

The delay could mean that the change would not be implemented until the year before the general election.