SOCIAL WELFARE: Anti-poverty groups have immediately accused the Government of breaking its promises to children at the expense of funding the Special Savings Incentive scheme and a low tax regime for the most wealthy individuals, writes Nuala Haughey

The Minister for Social and Family Affairs came out with her hands up yesterday when her Budget breakdown failed to honour a long-standing Government pledge to increase substantially Child Benefit this year.

The monthly increases of €8 to €10 are about a quarter of the amount originally due under a three-year commitment which should have seen the benefit increase to €149 for first or second children and €185 for third and subsequent children.

The cost of meeting this commitment would have been €414 million over a year, so Ms Coughlan and her Cabinet colleagues swallowed hard and made an unpopular decision, which she had already flagged some weeks ago. The measure means the monthly Child Benefit rate for first or second children will next year go from €117.60 to €125.60 with the rate for third and subsequent children rising from €147.30 to €157.30.

Anti-poverty groups instantly accused the Government of breaking its promises to children at the expense of funding the Special Savings Incentive scheme and a low tax regime for the most wealthy individuals.

Ms Coughlan had only half the amount at her disposal - €530 million - for social welfare measures in this Budget compared to the previous two budgets of more than €1 billion each.

The modest increase in Child Benefit from next April will cost €105 million annually, leaving the Minister with more money to spend on her priority groups of pensioners, widows and widowers and carers.

Instead of the Government meeting its commitment to a final increase in Child Benefit in one go in this Budget, the rise will now be spread over three years.

The Minister at a Budget briefing last night acknowledged the disappointment of parents with the measure. The move also came in for strong criticism from anti-poverty groups who valued the payment as a way both to tackle child poverty and deal with child care shortages.

"I appreciate that people had expectations, including myself, but I had to choose," said Ms Coughlan. She said that "in the context of the scheme of things presently and financial rectitude and prudence" she was "relatively happy" with the resources she had been allocated by Government.

Ms Coughlan said she had decided not to tax Child Benefit, which is a universal payment to all families regardless of their incomes. "There's a huge practical situation oftentimes but not always, it is the only access to income some people have regardless of who they are," she said.

With her lean budget, Ms Coughlan concentrated on increasing pensions and Carer's Allowance, while making only a modest €6 weekly increase in the lowest social welfare payment of €118.80 for a single person, just ahead of projected inflation of 4.8 per cent. The total increases in social welfare rates will cost €394.5 million in 2003 - the lion's share of the entire social welfare budget allocation.

While increases for pensioners and the elderly at risk of poverty were welcomed last night, the Combat Poverty Agency and other groups said the €6 payment increase would mean those living in poverty would not keep pace with general living standards.

The Irish National Organisation of the Unemployed said the €6 increase was "paltry," particularly when Mr McCreevy stated from the outset that this Budget would "protect weaker sectors in society". "This brings the unemployment assistance payment from €118.80 to €124.80 which still falls short of yet another Government commitment - under the life of the PPF the target was to bring the lowest social welfare rate to €127," said Mr Eric Conroy, the organisation's general secretary.

The increase for some of the poorer sections of society will be immediately clawed back by recently announced changes to rent supplements, which have already been criticised by housing groups and community welfare officers.

There was pessimism too last night from the Community Platform, which represents anti-poverty groups, of broken promises raising questions about Government commitment to deliver an equal and inclusive society in any new partnership agreement.

Nuala Haughey

Analysis