Joan Burton (Dublin West, Labour)

Many media commentators do not seem to like the fact that child benefit is a universal payment, paid to all families with children to cover that part of their life cycle where the demand on income is at its peak whereas the capacity to earn income is often constrained through caring responsibilities. Child benefit redistributes our income from times when we have less need of it to times when our needs are greatest. It should be no surprise then that universal child benefits are strong features of social protection systems in most developed countries. I am a strong supporter of universal child benefit payments. It is an important element of our social welfare system which should be retained even with structural reforms of the system.

Some commentators also claim supports for families with children should be targeted at those with low incomes. This point seems to be made in ignorance of the fact that child benefit is not the only mechanism to support families and that an increasing part of the total amount spent on support for families is targeted in this way. The social protection system provides assistance to low-income families with children through the payment of qualified child increases to primary social welfare payments and family income supplement. Qualified child increases are paid in respect of some 500,000 children. Approximately 26,000 families benefit from the family income supplement to their employment income which provides assistance in respect of approximately 60,000 children. Our tax code does not make provision for children but it is done through the universal direct child benefit payment, a system that has been in place since the early 1970s. There used to be tax allowances for children but they were done away with in favour of a universal direct cash payment to the caring parent, usually the mother, because this was considered to be the best way of delivering capacity to her to spend for the good of her children. The payment has worked well in that regard.

The Department spends more than €3 billion on children, two thirds of which goes on child benefit. This accounts for almost 15% of my Department's spending of more than €20 billion. One of the core commitments in the programme for Government is the restoration of fiscal stability. Given the scale of the economic crisis, the Government recognises that it is necessary to address all aspects of the public finances to ensure that they are sustainable and that fairness exists in the allocation of public resources. In line with the growth in the social protection budget during the boom, spending on child income supports increased from just under €1.3 billion in 2001 to approximately €3.1 billion in 2010. This was largely driven by the increase in expenditure on child benefit, which more than doubled during the same time period from €935 million to €2.2 billion. It is right that the Government should examine all its options in assessing the best way forward.

Consequently, the transition to a more balanced budgetary position simply cannot be made without affecting social welfare spending, including child income support payments. In the long term, this will help to maintain an adequate system of social protection for our citizens. While recognising these constraints, the Government is aware of the severe impact of the economic crisis on children and their families and we are determined to protect them from the worst consequences of this deep recession. I want to be part of a Government that will grow the country out of the recession and give children whom we correctly cherish so much an opportunity to become financially independent when they grow up.

I remind the House that the EU and IMF programme of financial support commits the Government to a further adjustment of at least €3.6 billion in the budget, including a reduction in expenditure of €2.1 billion. In making the necessary budgetary adjustments, the Government is determined to do its utmost to protect the most vulnerable people in society. Our social protection system is in urgent need of both reform and transformation. Since my appointment as Minister in March, I have examined the social protection system, schemes and policies. Transformation of our system of social protection is required to ensure that it provides adequate and meaningful support to people in order that they can achieve their full potential.

Sinn Féin Members referred to income poor families. It is bad to categorise children who are brought up in poverty as being in some way or other deficient in respect of the love of their parent or parents.

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