SIPTU to oppose tax on child benefit

SIPTU has warned it is prepared to "strenuously oppose" any proposals to tax child benefit, which it said was a combination of allowances negotiated under the successive programmes agreed between Government and the unions.

Warning that the idea of taxing child benefit had been rejected many times over the past few decades, Ms Rosheen Callender, SIPTU's national equality secretary, described recent media reports of such a move as a possible "kite-flying exercise" by the Minister for Finance, Mr McCreevy.

"If this is the case," she said, "there will be no shortage of reasons and people to shoot it down". There were any number of "major, moral, political, social, fiscal, legal, administrative and industrial relations reasons why taxes on children and families should not be increased by classifying child benefit as taxable income".

Ms Callender said the purpose of child benefit was to help with the cost of feeding, clothing and accommodating children.

Until recently, the allowance had come "nowhere near adequacy" but in 1994, a major review of the scheme had recommended that the process of subsuming all other State support for children into the child benefit allowance be accelerated.

Other allowances which were earmarked to be merged under the child-benefit heading included tax-free allowances for taxpayers and child-dependent allowances for social-welfare recipients.

Child benefit went to the major carer in the family and, according to Ms Callender, research undertaken for the 1994 review group showed it was generally spent on the intended beneficiaries, the children.

As a non-means tested and non-taxable payment to all families with children, child benefit was "the best and fairest way of delivering State support", especially to larger families with lower incomes, said Ms Callender. The benefit had also been found to be an effective way of tackling child poverty.

"So the agreed strategy for many years has been to freeze the child-dependent allowances, phase out child tax-free allowances and use the savings, plus whatever additional resources were available, to increase child benefit.

"This strategy was followed in successive national agreements and a major step was taken in January 1995, when the rainbow coalition in its first budget took the brave and controversial step of increasing child benefit by £7."

Ms Callender said SIPTU would "strenuously oppose" any attempts by the Government to tax child benefit.