Mary Hanafin (Dún Laoghaire, Fianna Fail)

The Deputy and I probably agree that we do not want a circumstance to arise in which people believe they are better off on social welfare. However, a person earning the figure cited by the Deputy would not be financially better off on social welfare.

In all of our discussions on the budget, especially its social welfare aspects, the Government considered the effects it would have on individuals and families, particularly those on lower incomes who are not dependent on social welfare benefits. This was one of the reasons I was particularly anxious not to proceed with the cuts in child benefit proposed in the McCarthy report. Not only would such cuts have had a severe effect on people on middle incomes, but we would have created a poverty trap by compensating those on lower incomes. The decision to cut child benefit by the lowest amount possible meant that we did not have to substantially increase the qualified child increase. To have done so would have made it difficult for people to extricate themselves from social welfare and enter employment.

At present, child benefit provides half of the support for a child in low income families whereas the figure ten years ago was 34%. The Department continues to target child income support and families in the correct manner. Combined, child benefit and the qualified child increase are higher than ever. In devising difficult cuts in the budget the Government genuinely set out to protect low income families, an objective we achieved in this case.

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