Dr. Karina Doorley:

An increase in the working family payment or child benefit will benefit households with children, primarily those located in the middle of the income distribution because that is where working family payment households tend to be located but it will not benefit households without children. To target those households as well would require USC and PRSI rates to be indexed in the same way the tax bands were indexed. After the budget, we made the point that the budget was framed around maintaining the standard of living for households in the face of rising prices. One way to do that is to index tax bands and credits but PRSI and USC also fall into that category. If they are not indexed, it amounts to a real increase in USC and PRSI payments for many households. If we want to specifically target households with children, then child benefit and working family payments are good instruments to do so. If we want to target families without children, PRSI and USC bands also need to be indexed.