THERE WAS a whiff of political kite-flying about it all. First, Minister for Social Protection Joan Burton expressed a preference for taxing child benefit where qualifying families received incomes in excess of €100,000. Later, she conceded this would not be possible for some years because computers at Revenue and Social Protection did not “talk” to each other. Officials were then said to be devising a mechanism whereby wealthy parents could voluntarily surrender their entitlements to child benefit. Finally, as the limp nature of this approach attracted criticism, Ms Burton rubbished the suggestion and denied she had initiated it.
The universal nature of some welfare payments has been a source of long-term criticism on the grounds of equity. Two years ago, Fianna Fáil ministers admitted they had considered taxing child benefit but had concluded it was not possible because of Constitutional and computer-based difficulties.
Little appears to have changed since then but two issues have been clarified. One, any wealthy family is free to voluntarily decline or surrender its entitlement to payments. And, pending resolution of computer and constitutional difficulties, an alternative to taxing child benefit is under consideration. An integrated welfare payment that would combine family income supplement and child dependant allowance, with the specific aim of helping lower-income families, has been proposed. The measure would accompany any Government decision to cut or to tax child benefit.
Ms Burton has emphasised that no decisions have been taken in advance of the December budget. That is understandable, given the disparate attitudes to welfare payments and taxation issues adopted by Fine Gael and the Labour Party in Government. Despite that, pressure is building to cut State expenditure and the Department of Social Protection, which spends about €2 billion a year, is regarded as a necessary contributor.
Last month, the IMF recommended “urgent action” in areas such as universal child benefit, medical cards and non means-tested pensions. Its advice drew a dusty response from Tánaiste Eamon Gilmore who said the agenda was “not something the Government has to follow”.
Ireland has an abysmal record on the incidence of child poverty. The recession brought a worsening in the situation, according to a recent survey. At the same time, the Government remains under intense pressure to cut spending.
Reduced payments for third and subsequent children were introduced in the last budget, without regard to the needs of low-income families.
Social studies have consistently found that a reduction in spending on already deprived children amounts to a false economy. Not only is it ethically unjust but the consequences in terms of youth alienation, unrealised potential and future crime levels are likely to cost immeasurably more. Any proposal to cut benefits to needy families should be examined in the context of a commitment to strengthen children’s rights in a referendum.