Séamus Brennan (Dublin South, Fianna Fail)

I thank Deputy Stanton for tabling this amendment and Deputy Penrose for his contribution. We have dealt with this issue on different occasions when dealing with Estimates and the budget. There is nobody in this House who would not put the elimination of child poverty as the number one priority in any approach to social issues. The budget and this Bill make a significant contribution towards that, increasing the lower and higher child benefit rates by €10 a month. The new monthly rates are €160 and €195, which standardises all three qualified childhood allowances, formerly the child dependant allowances, to a single higher rate of €22 per week. In the case of family income supplement, the weekly income threshold is increased by amounts from €15 to €185, depending on family size. Increases have been made in the rate of payment in the back to school clothing and footwear allowances by €60 per child to €180 for two to 11 year olds and by €95 per child to €285 for 12 to 22 year olds. Additional funding of €3 million is provided to extend the important schools meals programme. There is a disregard on the guardian's payment, contributory and non-contributory, from assessment for supplementary welfare allowance and rent or mortgage interest supplement. There is an increase in the spouse's income threshold for entitlement to a half rate qualified child allowance, otherwise known as CDAs, by €50 from €350 to €400 per week for recipients of the following payments: job seeker's benefit, illness benefit, injury benefit and health safety benefit. They are the main changes which are targeted at tackling child poverty.

In regard to child income support generally, it is important to note that child benefit as a percentage of total child benefit and CDA rates will be 62.7%. Prior to these changes it was 67.3%. Keeping the child benefit rate above the 60% or so level will avoid any disincentives. I do not want to repeat myself but to put this in simple forms there has been a fundamental shift in this respect. We cannot simply talk about child poverty and do nothing about it, and I suppose this change is at the expense of child benefit. If this money was not put into child dependant allowance, it would almost certainly be put into child benefit. Therefore, there has been a direct shift from the top two thirds of families who have children to the bottom one third of families who have children in the addition of the new CDAs, which will also come into effect from January but the child benefit changes do not come into effect until April. There is an immediate benefit in respect of the former and the money will be targeted directly at where it is needed. I strongly believe this is exactly the right approach to take now and the time is right to do it. Many studies on child poverty have been undertaken, including those by Barnardos, Combat Poverty Agency and many other fine bodies and agencies. We must target the resources at where they are needed.

I will outline some examples, which I will circulate to Deputies, of families in receipt of welfare benefits and the value of their overall package of benefits, as we are inclined to deal with welfare items in a somewhat disjointed way. When considering income tax scenarios, charts are normally presented which set out how individual families will fare. However, charts setting out how families in receipt of welfare benefits will fare are seldom presented. I have tried to advance this process by considering real life examples. I will use the example of a lone parent with two children, a category in which child poverty is to be found as all the studies highlight, one of whom is aged under six and the lone parent earns €20,000 per annum, the amount he or she is entitled to earn without losing his or her lone parent allowance completely. Such a lone parent does not pay income tax, although there is some PRSI in this case, and the net earnings of that lone parent would be €19,000. The child dependant allowance in that case would be €2,288, the one-parent family allowance would be €3,812, the family income supplement would be €1,872, the child benefit would be €3,840, the fuel allowance, if applicable, which it would be in most cases, would be €522 and the early child care supplement for the child aged under six would be €1,000. That means a lone parent with an income of €20,000 with two children, one of whom is aged under six, has a net income of €33,000, which involves a total social welfare package of €13,564. Therefore the total earnings of a lone parent with a small income of €20,000 will increase by €13,564. Under last year's budget such a lone parent's income increased by €4,000 and under this year's budget his or her income will increase by a further €9,000. There is an enormous and dramatic shift in terms of such a lone parent's increase in earnings this year over last year, when we did not include CDAs. There is a 46% increase in income in that example. That is not a skewed example; there are dozens of examples outlined here and they are all along the same lines, when account is taken of the increased CDAs and the FIS which is targeted at those on lower incomes. With the increased CDAs, the increase in payment in respect of a child may be €22 per month in addition to the payment of €10 per month, which means the payment in respect of many children will be an increase of €32. I did not simply select a good example in the one I outlined — there are others along the same lines. I will circulate these figures to Deputies.

A couple who have four children, two aged under six and two aged over six, and who are working with earnings of €30,000 per annum will receive €44,000, which involves a total social welfare package of €15,000. Therefore, their income will increase from €30,000 per annum to €44,000 — or €45,000 — which includes additional welfare benefit of €14,000 or €15,000 per annum. That represents a 29% gain this year over last year. The CDA element and the increase in FIS have a dramatic effect on low income earners and on people in receipt of welfare benefit, much more dramatic than last year. The CDAs directly contributed to that.

Deputy Stanton asked about child care provision. All the lists I outlined of what we have been doing for children, while not specifically for child care provision, represent a substantial improvement in income for families who have children. The Minister for Finance explained that he must find an extra €100 million this year for payments under the early child care scheme because only three payments were made last year and four payments must be made next year. That will cost an extra €100 million. Such an allocation will go into the system next year. The Minister also explained that from the income viewpoint, he increased the threshold from €10,000 to €15,000 in terms of people minding children. That is an improvement. It was acknowledged that we needed to do that to bring more people into the system.

The Minister for Justice, Equality and Law Reform said in his speech that my colleague, the Minister for Finance, talked about 56,000 child care places. So far, more than 32,000 new places have been created and a further 24,500 places have been supported with grant aid allocations amounting to €500 million over the past six years. He explained that to date more than 900 capital grant applications amounting to €170 million on the national child care investment programme have been invested.

I thank Deputies for their contributions on this amendment. I strongly argue that this is one of the strongest anti-child poverty packages ever introduced in this House because it makes a dramatic shift, as Members will note from the figures, from middle and higher income earners to those on welfare and lower incomes. That is precisely the right direction to take if we are to eliminate child poverty. I believe we can do this if we keep up the policies of targeting and showing preference. The easiest thing to do is to increase child benefit every year. It is politically popular and I would be much more popular in my constituency if I increased child benefit than to do what I did. I moved that €60 million down the line because of the argument made in this House that there is no point giving out about child poverty and then making universal payments to every child in the country. I made that deliberate choice and I think it will make a real difference.

See this speech in context