Mary Hanafin (Dún Laoghaire, Fianna Fail)

Child benefit is paid for all children up to the age of 16 years and also for children up to the age of 19 years who continue in full-time education and for children with a disability. Child benefit is tax free and is not affected by the level of income of the claimant.

The rates of child benefit have increased very significantly since 2001, by over 200% for the first and second child and by over 185% for each other child. In the same period, total expenditure on child benefit has increased by 297%.

In the context of the current economic circumstances, it has been necessary to take a number of steps to reduce overall public expenditure in order to restore order and stability in the public finances. Spending on social welfare payments at some €19.5 billion in 2009 forms a substantial portion of public finances. Expenditure on child benefit will reach €2.53 billion in 2009. In these circumstances, it has been necessary to limit spending on child benefit by lowering the upper age limit that currently applies from 19 years to 18 years. The impact of this measure is being phased in, with payment for existing and future qualifying children being halved from January 2009 and payment stopping from the 18th birthday from January 2010. The vast majority of leaving certificate students will not be affected by this change because over 70% are under the age of 18 years when they sit their leaving certificate examinations. Many others turn 18 within a few months of their exams.

It is recognised that any changes in child benefit entitlements may have implications for family budgets. Accordingly, in order to assist the more vulnerable in society, special alleviating measures are being introduced for those in low income and social welfare dependent households. A compensatory payment of €15 is being provided during 2009 and 2010 for any week during which those affected by this measure are receiving a social welfare payment, which includes an increase in respect of the 18 year old child or a family income supplement payment which includes payment in respect of that child. The compensatory payment will also apply where the child in question is receiving a disability allowance payment in his or her own right. In addition, households affected by the measure who also qualify for the back to school clothing and footwear allowance will receive an extra payment of €215, bringing the total payment in respect of such a child to €520. These transitional measures will cease in January 2011.

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