Mary Hanafin (Dún Laoghaire, Fianna Fail)

The programme for Government that was agreed in 2007 contained a commitment to amalgamate qualified child allowances and family income supplements to develop a second tier of income support targeted at the poorest families. The possibility of such a reform had been mentioned in other documents, including social partnership agreements. It was argued that such a payment would target child poverty by channelling financial resources to low-income families without creating significant disincentives to employment. The proposed second-tier payment would, in principle, seek to combine the advantages of family income supplements and qualified child increases while avoiding the disadvantages of targeted payments, such as the creation of unemployment and poverty traps. When the National Economic and Social Council was asked to examine the feasibility and effectiveness of the merging of the child income support payments, it did not reach agreement on specific recommendations. In December 2007, the council's secretariat published a research paper that identified how such a payment would operate, in broad terms, and the significant number of issues which would need to be addressed. The secretariat's report included a useful preliminary estimate - approximately €775 million - of the net cost to the Exchequer of such a payment. The report concluded that such a payment would make significant demands on public service funding and administrative systems, and would take some time to implement. It is clear that additional resources of this scale are not available at present. The renewed programme for Government that was agreed recently did not contain a specific commitment to the introduction of a second tier child income support payment. In its deliberations on possible budget changes in the child benefit area, the Government is considering the needs of low income families and those who depend on social welfare.

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