Dáil debates

Tuesday, 1 December 2009

12:00 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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I move:

That Dáil Éireann:

noting:

- the ongoing high cost of raising children in Ireland today and the significant cuts that have already been made to family income;

- that the early childcare supplement will be abolished from January;

- the continuing very high cost of child care;

- that every child deserves to be cherished and recognised by the State, regardless of the circumstances of its parents;

- that there is now no recognition of children in the tax system;

- that the universal nature of the current system of child benefit does not disincentivise work or add to poverty traps; and

- that a banded approach to child benefit would create several serious anomalies, discriminate against certain children and parents, create new poverty traps, and, in some circumstances, discourage participation in the workforce;

believes that cutting child benefit would be far more deflationary than alternative revenue raising or cost-saving measures open to the Government; and

calls on the Government to maintain child benefit at the current level in the forthcoming budget."

I wish to share time with Deputies Burton and Tuffy.

Photo of Kathleen LynchKathleen Lynch (Cork North Central, Labour)
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Is that agreed? Agreed.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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In the April budget, the Minister for Finance announced that child benefit would be means-tested or taxed in the following budget - all he needed to do was to work out how to do it. Eight months on, he still has not managed to do that. Rather than accepting that he cannot achieve savings the way he intended to do, he is still intent on achieving them anyway. Some Ministers apparently favour a straight cut across the board while others favour a three-band system. The only certain thing is that the Government is intent on targeting families and children.

The motion before us tonight calls on the Government not to cut child benefit in the forthcoming budget for a number of reasons. Cuts in child benefit are not acceptable because family incomes have already been significantly cut in the past two budgets. There should also be no cut in child benefit because of the continuing high cost of raising children, including the cost of child care; because there is no recognition in the tax system; because of the damaging effects such cuts would have on the economy; and because any of the proposed reforms would create poverty traps, create work disincentives and increase the risk of child poverty.

Child benefit is a payment made to parents, usually the mother, in recognition of the significant extra costs in rearing children particularly in households with young children. It arose originally as compensation for and recognition of the high costs associated with rearing large families. In more recent years, it has developed as one of the most important social policy instruments because it provides protection against child poverty, but does not create poverty traps in doing so. It provides income support for children regardless of their parents' means, marital status or work status. It provides a financial buffer for parents who leave the workforce in order to care for their children. In the case of parents who remain in the workforce, it contributes to the extremely high cost of child care.

It is precisely because it is such a key instrument of social policy, and precisely because it seeks to achieve so much, that child benefit is a relatively generous payment. It is a payment greatly valued by women, often long after the payment ceases, because it recognises the role that women play as mothers and carers. For many women, it is the only direct payment they receive.

It is not good enough for the Government to claim that just because the bill for child benefit has now reached €2.5 billion, it must be cut. We must consider what child benefit is achieving and how cuts would adversely impact on thousands of families. Child benefit needs to be relatively generous because there is no recognition of children in the welfare or tax systems, and because there is a complete lack of State-supported services for children.

In my constituency, as in many others, it costs €65 to bring a child to the doctor. Child care costs more than €1,000 per month for five days a week and more than €700 for three days a week. While the cost of living has come down generally in the past 12 months, these two costs that impinge heavily on parents, child care and doctor visits, have remained at the same level and in some cases have increased. In other countries, parents can rely on affordable access to a doctor, good early childhood education, public child care and a range of options for older children. Child benefit here essentially compensates parents for a lack of investment in those critical services for children.

Families with children also tend to have big mortgages. Large numbers of families are already struggling to fund these mortgages even with reduced interest rates because of job losses, reduced hours or pay cuts. It seems that the Cabinet has forgotten that families have already borne the brunt of severe cuts. The April budget shamelessly targeted families. It reduced mortgage interest relief; halved the early childcare supplement and will abolish it from January. As a result of that budget, parents of young children will lose several thousand euro a year - as well as taking pay cuts and increases in levies along with all other workers.

Child benefit has already been cut for 18 year olds, a decision which will lead to a much higher rate of young people dropping out of school and college. There is no attention in Government and little in the media given to the cumulative effect of the past two budgets' cuts on family incomes. By my calculations, a single-income couple with two children on an income of €40,000 - not especially well off - lost €250 per month from the decisions taken in the April budget. This will increase to €330 per month from January when the full effects of that budget take effect. This means that such a family will already have €80 less per week to spend before any changes in next week's budget. This is on top of the several dozen cuts, charges, taxes - and for public service workers, pension levies - introduced since the October 2008 budget.

Since April, a welfare dependent family has lost €125 per month so far and this will rise in January. Since April, a double-income family on €70,000 has lost €330 per month so far and this too will rise from January. There are only so many times the Government can go back to the well. One public sector worker contacted me yesterday expressing his dread at the prospect of the coming budget because along with the cuts he and his family have already suffered, the Government has indicated he will need to take a cut in pay and most likely a cut in child benefit next week. That man is dreading next week's budget because as it is he can barely survive. He can barely sustain the kinds of cuts he has suffered in the past two budgets and any further cuts to his family income will simply be unbearable for that family. That situation is mirrored thousands of times over throughout the country. The bottom line is that child benefit has become an integral part of the family household budget. Parents depend on it to provide for their children and cutting it will cause hardship in a great many cases.

Let us consider what the experts have said about the Government urging that child benefit should be cut. The ESRI, the McCarthy report, the Commission on Taxation and the Minister for Social and Family Affairs in conjunction with her departmental officials have all considered reforming child benefit but none of them has come up with a practical and fair way of achieving savings. The ESRI could not work out how to tax child benefit without major legal and bureaucratic problems so it simply opted to recommend a 20% across the board cut. That is simply not good enough. It is obvious that a 20% cut places a far bigger burden to those on low incomes than those with greater means. There is no fairness in that and in terms of child poverty such a cut across the board could reverse much of the progress in tackling child poverty in recent years.

The McCarthy report was even worse. As the Tánaiste admitted, there is no social policy in the McCarthy report. With equal disregard for its effects, it too advised a 20% cut across the board and the standardisation of rates without regard for their potential impact. Anyone could do that. It was silent on how this could be done in a workable way and where costs would not make it counterproductive. It was a similar story with the Commission on Taxation, which recommended the taxing of child benefit but could not outline exactly how it would work. Its report stated:

Child benefit should be taxable income.

- The taxing of child benefit should be benchmarked against alternatives, including means testing, to ascertain the most effective method of achieving the aims and objectives of the child benefit programme.

- If taxation is applied, we recommend the introduction of a child tax credit to offset the additional tax payable in respect of child benefit for those in the lower half of the income scale.

All of these approaches are intellectually lazy and disregard the available evidence on the effect of across-the-board cuts on child poverty.

In fairness to the Minister, her Department considered the issue in more detail. On "The Frontline" a few weeks ago, the Minister suggested the Government might favour a three-banded approach with no cuts for those on welfare or family income supplement, some cuts for those on low and middle incomes and larger cuts for those on higher incomes. I have no problem in principle with lower income families receiving more in child support than families with very high incomes. However, wanting this and actually achieving it are two different things. First, the biggest advantage of the universal entitlement is that it creates no disincentive to work and no poverty trap. As soon as it is means tested, it will become a poverty trap. The concentration of child benefit on lower income groups would stigmatise the payment and create major anomalies for any parent going from welfare to work. The welfare system is already riddled with poverty traps such as the rent and mortgage supplements and the rules concerning the back to education allowance and the back to work enterprise allowance. We do not need more anomalies.

In addition, such a change would be an administrative nightmare. Already this year the Revenue Commissioners have struggled to handle the changes in mortgage interest relief and income levy. The Government has no idea how much extra it will cost to assess entitlement. It does not have enough staff to ensure jobseekers' applications are processed in time, so how on earth will it manage even more work? The Minister's proposal that high earners declare themselves as such is laughable. The wealthy have never declared their income for tax purposes, so why does the Minister expect them to change their ways now?

Relying on the family income supplement is fraught with difficulties. FIS continues to suffer from chronically low take-up rates. Only 25,000 families are currently in receipt of payments. In addition, it excludes the self-employed and workers with intermittent work patterns, and does not factor in costs such as child care and mortgage repayments.

It is disappointing that there are other revenue raising options available to the Government but it refuses to consider them. The Government has a duty to find savings where it can. The Labour Party accepts that adjustments worth €4 billion are required this year. However, the Government must also pursue policies that will have the least impact on the economy and on jobs. Cutting back on child benefit is one of the most deflationary things possible. It will lead to further job losses in crèches and in the retail sector. It will take hundreds of millions of euro out of the domestic economy at a time when it needs a stimulus.

The State spends about €2 billion a year on unnecessary tax subsidies. About €600 million goes on relief on rental income for landlords, €400 million on property reliefs, and several hundred million on various forms of pension relief for the very wealthy. It is incredible that the Government can so easily overlook these areas when formulating a budget for 2010, especially as cutting back on these is likely to be far less deflationary than cutting child benefit.

If the Minister is really interested in ensuring that child benefit does not go disproportionately to the better off, the fairest and most practical way to make savings is not to have three bands of child benefit but to have three bands of income tax. Various reports suggest the Government is seeking to save more than €300 million by cutting back on child benefit. The Government could raise just as much money by increasing income tax on the balance of single incomes that exceed €100,000. This would avoid targeting families and exclude low and middle income groups. The Revenue Commissioners estimate that such a tax would yield €355 million.

I cannot understand the Government's approach on this. Why is it so afraid of taxing the better off and yet so intent on cutting child benefit? In a few minutes the Minister will stand up and tell us she does not have any choice in the matter and that savings must be made from the social welfare budget. However, this is not the case. The reason the social welfare bill is so high is not that welfare is too generous but that there has been such an increase in unemployment. The obvious way to reduce the social welfare bill is to get people back to work and safeguard jobs. The Government has utterly failed to do that.

The public, while understanding the need for a difficult budget, will simply not tolerate the Government's taking the easy option of cutting social welfare while refusing to cut corporate welfare. Fairness demands that cuts must start at the top. Responsibility demands that the Government tackle the budgetary situation on that basis and that some element of consensus be achieved. If the combined efforts and collective intellectual weight of the ESRI, an bord snip nua, the Commission on Taxation and the Department of Social and Family Affairs cannot come up with a workable - not to mind fair - way of cutting the child benefit bill, the Minister herself is unlikely to be able to do that in the next seven days.

The Labour Party suggests the establishment of three rates of tax rather than three rates of child benefit. This would avoid creating new poverty traps; it would not hit families; it would target the better off in obtaining savings; it would have public support; and it would achieve greater savings for the Exchequer. I ask the Minister to engage in an honest debate on this issue and give us her views on the Labour Party proposals. I challenge her to tell us why she is not prepared to target the better off but is intent on targeting children and families.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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The Irish tax code is a funny thing. It can recognise, and has recognised, Pino Harris and his yacht Christina O. It recognises stallions at stud. It also recognises high-achieving sportsmen, heritage properties, writers and artists. However, it does not recognise children, the cost of raising a child and the burden that places on the incomes of parents who are taxpayers. That is why child benefit is supposed to be a universal payment, paid to the caring parent - usually the mother. It is this way because the tax code contains no recognition of children. A person or couple who work and have a child pay the same amount of tax as an individual or couple with no dependent children.

Many years ago, at her inauguration as President, Mary Robinson spoke of mná na hÉireann. Child benefit is, has been and will continue for a long time to be mainly an issue for mná na hÉireann and their children. That is why it is so vulnerable. Since 1944 when Seán Lemass introduced the children's allowance, every time there has been an economic crisis one of the suggested solutions has been to tax or means-test the payment. This goes in cycles. It disappears when the economy is going well and comes back as a critical debating point when the economy is in crisis.

Given that it is so valued by women and their children, in a way I have been quite touched by the number of young fathers, particularly in the ranks of Fianna Fáil, who have stood up and stated manfully that they do not need child benefit. It is always open to them to return it to the State. Male journalists and male economists have similarly suggested, because they are middle class and relatively well-off in salary terms, that they are not convinced they need child benefit. I would like to hear the views of the mothers of their children on child benefit.

When the early childhood supplement was abolished earlier this year, many parents accepted the decision, knowing it had been introduced by former Taoiseach Deputy Bertie Ahern as a payment in the run-up to the last general election and that it was a bribe which drove up child care costs in every crèche and child care service in the country.

Child benefit is keeping many families afloat. We all know many of the hundreds of thousands of young families where the dad worked in construction among the legions of chippies, sparks and brickies, all of whom did well and worked terribly hard during the boom. Mr. David McWilliams described them as breakfast-roll man and they voted in large numbers for the Minister's party. Most of them have two children and a reasonably large mortgage and now they have little or no work. Child benefit is keeping bread on the table. It is paying the food bills of a significant number of families who have had a massive reduction in their income. Often the grandparents are helping to pay the mortgage to keep the wolf from the door, put food on the table and keep the house from being repossessed. That is true of so many families in so many parts of the country to which I have spoken recently and it constitutes a kind of stimulus in the current extraordinarily difficult economic conditions for so many families.

The Minister's proposals, those of the various groups to which my colleague, Deputy Shortall, referred, involve either means testing or taxing child benefit. These date back to 1944. I received a report on that as Minister of State at the then Department of Social Welfare in 1995. It is like a wheel, where the same suggestion comes up over and over again. Those horses - means testing and taxation - will not gallop.

This is important to our future. The critical problem with means testing or taxing child benefit is that it would constitute another significant poverty and unemployment trap. People who are surviving on the margins make economic decisions as to what maximises the money in the house for them and their children, and what puts the food on the table.

If the Minister wants to reform child benefit, then she should integrate the tax and social welfare systems. That is the action to take. We have never had refundable child tax credits even though we now have tax credits throughout the system. I recognise that they are technically extraordinarily difficult to implement, but they are implementable and they have been implemented in other countries. This does not work well for the reasons about which Deputy Shortall spoke. Much of FIS is used for low-paid employees in public service jobs, for example, in hospitals. Many private employers will not touch FIS because there is too much bureaucracy involved and they prefer to throw an employee a few bob under the counter. That is the reality, as the Minister will hear if she goes out to speak to small firms about FIS and the bureaucracy involved.

Child dependant allowance is a poverty trap. People argue for it in easpa an mhalairt. Everybody knows that if a person gets stuck on social welfare, child dependant allowances, rent supplement, etc., he or she would need to earn €500 to €600 a week net, or €700 gross taking account of tax, PRSI, getting to work, etc., in employment in order not to be out of pocket. If the Minister goes down this road, she will create more poverty and unemployment traps. What we do not want building up in the economy is the disaster we saw in the 1980s that lasted right up to approximately 1995 where one found on going into local authority estates, whether in the Minister's constituency or mine, large numbers of people on the dole because they did not have much of a paying alternative. The Minister is proposing to make poverty and unemployment traps worse.

In terms of work incentives, the advantage of the child benefit system is that, whatever the family and whatever the parent, if one wants to go out to work or if one wants to stay at home with one's children, child benefit is not impacted on. If the Minister decides to means test or tax child benefit, where next year many of these families with two children and a large mortgage will have one income only and individualisation will come back to bite the Government badly, it will make economic sense for many couples simply to separate and for one parent to become reliant for a long period on the State. Doing that will give families an economic incentive to part rather than the Government providing an incentive for children to be raised and nurtured in a family of two parents, which is probably best for most children.

If the Minister continues in this way, many couples who might otherwise get married will not take the plunge because they will lose too much in social welfare benefits if they enter into a committed long-term relationship. At present, if a woman on lone parent's allowance goes to live with somebody who is working, she may lose her housing benefit and her lone parent's allowance. She will become the dependant of the person who is working. In that situation, particularly if one adds in rent allowance, such a family could lose more than €300 a week. If the Minister proceeds to tax or means test child benefit, that situation will become worse.

In this country, child benefit is society's contribution to the rearing of the next generation. In almost all Scandinavian countries child benefit is a universal payment. In fact, there are many other benefits for children worked into the welfare codes of those countries. In many ways, those are the countries which we ought to aspire to be like. Those are countries where there is a high quality of provision of services for children, including preschool. Rather than a race to the bottom as regards children's welfare, we should try to model ourselves on best practice throughout the European Union.

In looking at the forthcoming budget the Minister, along with her colleagues, has the difficult task of finding approximately €4 billion. There is general agreement to find approximately €1 billion of that in savings in public sector pay. We know that about another €1 billion will probably result as savings in the capital programme. We are also aware that there are a number of efficiencies and savings available from the McCarthy report that are not particularly contentious and which would probably yield €600 million or €700 million. In the revised programme for Government, the Government seems to have agreed to a carbon tax, which will yield somewhere around €500 million. That leaves a gap. The Labour Party's suggestion, as set forward by Deputy Shortall, is that the gap could be bridged by reducing thresholds for various tax reliefs embedded in our system, some of which relate to property. Those property tax reliefs currently amount to about €435 million per year. The Minister's colleagues are probably asking her to offer up something like €300 million plus in child benefit. That seems to be the suggestion in the media, even though the ESRI has suggested a larger figure.

Property-based tax reliefs are what helped our economic bubble to burst. The Government should consider passing on them because they are basically a dead-weight in the system. Similarly, pension benefits for some very high earners are essentially a form of tax-saving and investment strategy, rather than savings for pensions and retirement. We will have plenty of suggestions as to where the Minister can find an alternative to this.

It should be remembered that child benefit is spent in this country - on children's shoes, food and school books. It is probably one of the best stimuli. I strongly recommend the motion moved by my colleague Deputy Shortall.

Photo of Joanna TuffyJoanna Tuffy (Dublin Mid West, Labour)
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Deputy Burton referred to the history of child benefit and I wish to provide some more details on that. In 1943, it was a progressive move by the then Minister, Seán Lemass, to introduce a Bill to provide for a universal allowance for the third and subsequent children in a family. The Labour Party supported the introduction of child benefit at that time. Almost 70 years later, the legislation is still in place and we have built on it. For all the cynicism about politics, that was a time when worthwhile measures were taken in this House. The allowance was introduced to provide support for large families with three or more children. Lemass's argument for bringing in the payment was that wages did not relate to family size because a person might earn the same amount irrespective of whether he had a family. In addition, there was nothing in the tax system that recognised the extra cost of raising children. Lemass argued for a universal payment that would not be means tested. That was because the Government of the day wanted to ensure there was not the slightest suggestion of charity being associated with the allowance. In the 1943 debate, Lemass said a means test would involve an inquisition into the affairs of families, which is often resented and as a general rule is undesirable. He was frank in his speech to the Dáil, stating that the consequences of introducing a children's allowance would be the need for taxpayers, irrespective of whether they had children, to pay more.

Lemass also referred to models in other countries, including the 1942 Beveridge report which proposed Britain's welfare state, including the national health service. Such progressive moves were also being made in other countries, including those undertaken by US President Franklin D. Roosevelt to cope with the Depression. Those were hard times, including the Second World War and food rationing, which also affected this country. At the time, there were progressive proposals on how societies should work together to deal with the important issues of the day. One such step taken by the Dáil at that time was the introduction of a payment which was about valuing children.

The reasons for having child benefit today, which is not means tested, are the same as obtained in 1943. We value children and believe they have unique rights. Children are not allowed to work, as we believe they should be protected during their upbringing and should also have the opportunity to avail of education. Children have no income, so the allowance was a payment for children then, as now. Parents still receive the same wages irrespective of whether they have children, and this is the State's way of providing an income for children. If we get rid of universal child benefit we will be taking away money from the children we are supposed to protect.

Other countries have adopted the principle of universal child payments similar to ours. In 2006, a report on the cost of raising children in North European countries noted that seven such states had universal, non means-tested child benefit payments to parents. They were Denmark, Sweden, the Netherlands, Finland, Norway, Germany and the United Kingdom. It is notable that the Scandinavian countries have much more universality in their social provisions than we have in Ireland. We have some such universality, but it is limited. Most of our social welfare payments are means tested. The economies of countries that are doing best in terms of equality are better than ours. They have more infrastructure and better provision of public services. They have more universality and equality than Ireland. Rather than rolling back on the promise we made in introducing the principle of universality concerning child benefit, we should try to introduce more universality, for example, in the health system.

We should preserve the universality we already have. These hard times are not a reason to roll back on progress concerning universality. The countries that introduced such universal provisions did so just after the Second World War in financially straitened times. In Britain, where so much housing had been destroyed, they introduced a national health service based on the principle of universality. That is the direction in which we should be heading, rather than using our economic recession as an excuse to roll back on the progress we made in 1943.

A generous philosophy underpins the principle of universality. Seán Lemass demonstrated a generous political impulse in deciding to introduce a universal children's allowance. The measure is about social solidarity and working together on what we value as a society. We have universality in education but not in health, which is a dysfunctional system. Our education system is a good one, which provides for all our children. It is not perfect but it has helped society to make great progress. We also had universality for medical cards, but the Government demonstrated a begrudging attitude in going after the over-70s' medical cards, particularly given the small savings that were made as a result. Similarly, when people talk about withdrawing universal child benefit, it displays an ungenerous political motivation.

The 1916 Proclamation referred to cherishing all the children of the nation equally. The signatories of the Proclamation valued children's unique rights. Their concept was that we should cherish and protect them. In many respects Ireland does not have a good record on children's rights. That is all coming out now, with the Ryan report and the report by the Commission of Investigation into the Catholic Archdiocese of Dublin as well as the fact that we have stalled in doing anything about children's rights in the Constitution. Many other countries provide for children's rights in their constitution, and it is not a big deal. We should get on with it and provide children's rights.

To vindicate these rights, we need to work together to protect, value and cherish our children. Rather than begrudging children this payment, we should build on it, maintain universality and do more to vindicate their rights in our society.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I move amendment No. 1:

"To delete all the words after "Dáil Éireann" and substitute the following:

"recognising:

— the importance of the child benefit payment to all families with children, and particularly those on low incomes;

— that, since 2000, the monthly rates of payment for child benefit has increased from just €53.96 for the first child and €71.11 for the third and subsequent children to €166 and €203 respectively;

— that overall expenditure on child benefit grew from just €638 million in 2000 to €2.5 billion in 2009;

— that the rate of consistent poverty among children, as measured by the EU survey on income and living conditions, has almost halved since 2003 – from 12.2% to 6.3%;

— that funding under the 2 child care programmes, namely the Equal Opportunities Childcare Programme and the National Childcare Investment Programme, is expected to create some 65,000 child care places, the majority of which are already in place;

— that 98,000 places will be available next year under the new free pre-school scheme;

— that given the scale of the current economic crisis, failure to stabilise the public finances would lead to increased borrowing and jeopardise Ireland's ability to fund vital social services in future years; and

that, in that context, it is appropriate to examine the €2.5 billion being spent on child benefit and consider how savings might be made in this area; calls on the Government to consider the various options around child benefit and their implications for the needs of families with children, particularly those families on lower incomes, in the context of the forthcoming budget."

The forthcoming budget is being framed at a very difficult time for Irish families. As Minister at the Department of Social and Family Affairs, I am very conscious of the needs of the 412,407 people who were on the live register at the end of October 2009. I fully understand that a wide range of other groups - such as people with disabilities, carers and pensioners - depend on the welfare budget for vital support. I appreciate the importance of child benefit to all families with children, but particularly those on low incomes. I assure the House that this Government has done and will continue to do the very best that it can to protect the most vulnerable people in Irish society.

Over the past decade there have been significant increases in welfare payments. The State contributory pension has increased from €113 to more than €230 per week. The weekly rate of jobseeker's allowance has been raised from €93 to €204 per week and the carer's allowance has been increased from €89.54 to €220.50 per week. We have provided increases in welfare rates that were far in excess of increases in both prices and wages. Since 2000, the rates of child benefit have increased from just €53.96 for the first child and €71.11 for the third and subsequent children to €166 and €203, respectively. In fairness, Deputy Shortall in her opening speech, acknowledged that these were relatively generous payments. In the same period, overall expenditure on child benefit has grown from just €638 million to approximately €2.5 billion. As a result, approximately 12% of gross social welfare spending in 2009 will go on child benefit. It is not true, as Deputy Burton has said, that child benefit only gets looked at in bad times. Child benefit was significantly increased in the good times.

Currently almost 600,000 households receive child benefit in respect of 1.1 million children. Deputy Tuffy's contribution, where she outlined the reasons child benefit was introduced in the first instance in the 1940s, highlighted the fact that it was provided for third and subsequent children for large families as an anti-poverty measure. Poorer families were, and are today, more likely to have more children. As she quite rightly quoted, it was introduced in the first instance, not as charity, but to support such families and ensure it was an anti-poverty measure. Subsequently, it was to become available to all children and all families.

A family with four children now receives €738 per month, or €8,856 per year, in child benefit, regardless of how high the parents' earnings from employment are. As Deputies will be aware, in addition to child benefit, families dependent on basic social welfare payments may also receive an extra payment for each of the dependent children, through the qualified child increase, QCI. The current QCI rate of payment is €26 per child per week - up from €21.60 per child in 2006. More than €530 million is expected to be spent this year on QCI payments.

To ease the transition from welfare into work, people who have been in receipt of a jobseeker's payment, with a full-rate QCI for at least 12 months, can generally keep that increase for 13 weeks if they take up work that is expected to last at least four weeks.

While this, and other transition arrangements, can help people move back into employment, the family income supplement, FIS, was designed to provide ongoing financial support to low-income working families. Expenditure on this scheme has also increased dramatically in recent years. In 2000, just €39.4 million was spent on this scheme. By 2008, it had grown to €181 million and this year more than €200 million is being provided for FIS.

Between 2000-08, we significantly increased the income thresholds for FIS so that more families would qualify for it. For example, for a family with four children the income threshold increased from €372 per week in 2000 to €760 a week in 2008. As a result, the number of families benefiting from the scheme grew dramatically - from just 13,000 in the year 2000 to over 28,000 families last year. In the 2009 budget the FIS threshold were increased further to enable more families to qualify for it. To see how this works, take a family with one parent working full-time and the other working 19 hours a week - both on the minimum wage. Their gross income from employment would be €510.35 per week, leaving them with a net income after the income levy of €505.25. If they have four children, the improvements we have made mean they would now be entitled to a FIS payment of €176.85 per week, as a top-up to their wages, giving them a combined income from employment and FIS of €682.10.

If only one parent in the same family was working, and he or she was in full-time employment at the minimum wage, the gross income from employment would be €346 per week and their additional income from FIS would be €272.40 per week. The combined income from employment and FIS would therefore be €618.40. In both scenarios they would also be entitled to child benefit of more than €170 per week. That shows a real commitment to supporting not just people on social welfare. Conscious of the fact that there can be a poverty trap, we also support those low-income families through FIS.

Major improvements have also been made in recent years in the back to school clothing and footwear allowance. In 2000 the rate for 2-11 year olds was just €80 per annum, while €99 was paid for children aged over 12. This year, the payment rate is €200 for 2-11 year olds and €305 for those aged over 12, recognising that this is a particularly expensive time of year for families.

These improvements in child benefit, qualified child increases, the family income supplement and the back to school clothing and footwear allowance have had an enormously positive impact on the lives of Irish children and their families. The most recent EU Survey on Income and Living Conditions in Ireland published by the CSO last week indicated that the rate of consistent poverty for children had almost halved from 12.2% in 2003 to 6.3% in 2008. Other developments over the 2003-08 period, such as the increases in employment rates that preceded the current downturn, improvements in the minimum wage, and increases in basic welfare rates, also contributed to this decrease in poverty rates. However, there is no doubt that increases in child-related income support payments played a major important role in lifting so many children, and their families, out of poverty. The Government has pursued - and will continue to pursue - a comprehensive approach to tackling poverty.

Even throughout the economic difficulties of the past two years, the Government has done its best to prioritise social welfare. The October 2008 budget provided for increases of between 3% and 3.8% in the basic payment rates at a time when inflation for 2009 was expected to be 2.5%. In reality, prices have dropped considerably this year. By September 2009, prices - as measured by the consumer price index - had fallen by 6.5% and are now forecast to drop by an average of between 4% and 5% for the year.

While child benefit payment rates were not increased this year, a package of improvements in other child income support and family payments was put in place from January 2009, at a cost of €56 million. These included: an increase of €2 in the qualified child increases payable with social welfare payments bringing the rate up to €26 per week; an increase of €10 per week per child in all family income supplement income thresholds, giving an increase of up to €6 per child per week; and an increase of €50 per week in the income threshold for the back to school clothing and footwear scheme to enable more families to qualify for it.

In framing the April supplementary budget, very tough decisions had to be made across the whole range of Government expenditure. In that context, the provision of €21.3 billion for social welfare services in 2009 - 20% more than the amount spent in 2008 - was a clear demonstration of our commitment to protecting the most vulnerable people in society. Tax rates and borrowing had to be increased to fund this extra expenditure on social welfare.

Deputies will be aware that the Government expects to have to borrow €26 billion this year. It also estimates that 16% of all tax revenue next year will go on servicing the national debt, compared to 8.5% in 2009 and just 3.5% in 2007. This means that €16 out of every €100 that each person pays in tax next year must be spent on repaying loan interest instead of being used to fund social services directly. Clearly, the more money we borrow over the next few years, the more interest we will be obliged to repay in the future and the higher the proportion of people's hard-earned wages that must be spent on servicing the national debt.

The Government wishes to avoid an unsustainable increase in the national debt that could hamper Ireland's social progress for a generation. That is the reason it is determined to reduce spending, and consequently borrowing, by €4 billion next year. In framing next month's budget, the Government faces difficult choices. While it is aware it must reduce expenditure by €4 billion in 2010, it also is aware there is no easy or pain-free way of so doing. Deputy Shortall stated that the Labour Party acknowledges the €4 billion must be found. However, in addition to income, expenditure must be tackled also. Social welfare spending makes up the largest single block of Exchequer gross current voted expenditure, accounting for 37% of the total, at slightly more than €21 billion this year. Public pay and pensions, at €19.8 billion, accounts for 35%, while other programme expenditure, not including pay, at €15.8 billion, accounts for the remaining 28%. The scale of the savings required from public expenditure as a whole means that some reductions must be made in the social welfare area.

I appreciate that it will be hard for people to cope with any decrease in welfare spending. However, unless the Government takes steps now to reduce overall public expenditure and restore stability to the public finances, it risks making the economic situation far worse for everyone, including welfare recipients, in the long term.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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What about tax expenditure?

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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In that context, much as though the Government would prefer to avoid so doing, it is appropriate to consider the €2.5 billion being spent this year on child benefit. As I noted earlier, the rate of child benefit paid to all families has increased dramatically in recent years. In 2000, parents received €53.96 per month for each of their first and second children. Today, they get €166 per child every month. In 2000, the rate paid for each of the third and subsequent children was €71.11 per child per month, while the current rate is €203 per month. In the same period, overall expenditure on child benefit has grown to more than €2.5 billion.

The Government is proud to have been able to deliver such significant increases in payments to families when the resources were available. It also is proud that, as a result, child income support for parents in Ireland now is far higher than in many other European countries. However, in the current economic environment, it simply cannot afford to keep spending at the same level as it did when its tax revenue was much higher. In its recent report on the Irish economy, the Organisation for Economic Co-operation and Development, OECD, acknowledged that while the amount of resources spent on social protection had been comparatively small in Ireland in the past, there has been a significant increase in the generosity of welfare provision over the last decade. The OECD singled out the fact that child benefit had increased by a factor of almost four since 1997 and noted that Irish child benefit and other social welfare benefits are now high by international comparisons, particularly with respect to the United Kingdom. More generally, the OECD suggested that the universal payment of benefits which are not related to household income should be reconsidered.

In considering how changes might be made to child benefit, the Government is conscious that different families rely on this payment for different reasons. Families reliant on basic welfare payments such as the jobseeker's allowance or those on low wages are likely to use their child benefit to help put food on the table or to put shoes on their children's feet. Families on middle incomes with large mortgages may rely on their child benefit to meet relatively basic needs. For many women, child benefit supports them working outside the home by providing a significant contribution towards their child care costs. In addition, for some women in high-income households, child benefit may be the only income that is paid directly to them. The Government appreciates, therefore, that child benefit can be an important source of income for all families for different reasons and its deliberations on the future of the payment are being informed by this understanding.

Members will be aware that the Commission on Taxation recommended in principle that the child benefit payment should be taxed, while the McCarthy group recommended an across-the-board cut in child benefit payment rates. However, the Government's deliberations on the welfare budget are not simply being informed by analysis and proposals from the aforementioned groups alone. They also are being influenced by the understanding each Cabinet member has, both as a Minister and as a constituency Deputy, of the real difficulties facing families at present. As Minister for Social and Family Affairs, I have met a wide variety of groups recently to listen to their views about the forthcoming budget. As part of these discussions, I have listened to the views of groups such as the Society of St. Vincent de Paul, the National Women's Council of Ireland, the Children's Rights Alliance, as well as CORI and Social Justice Ireland in respect of child benefit. The views of these and other groups have informed my Department's consideration of potential changes in this area. Obviously, Members must wait until the budget to ascertain what the Government's final decision will be. I can assure the House, however, that in considering all the options, the Government is determined to find the fairest way of achieving savings, while protecting those on low incomes as much as possible.

The motion before the House tonight also specifically refers to child care. This has been an issue on which the Government has been increasingly proactive in recent years. Under the Equal Opportunities Childcare Programme 2000-2006 and the National Childcare Investment Programme 2006-2010, funding has been approved which will result in the creation of approximately 65,000 new child care places. The evidence available to the Government is that previous shortfalls in centre-based child care now have been met despite a large increase in demand due to rising numbers of women at work and immigration. A survey released by the National Children's Nurseries Association last year suggested that the average fee for full-time day care had fallen slightly since 2007. Current indications available to the Office of the Minister for Children suggest that fees have fallen further this year, as one would expect at a time of deflation. When combined with the reductions in fees for children supported by the community child care subvention scheme and the benefit of the new free preschool year, child care costs are falling for parents.

The Minister of State, Deputy Barry Andrews, who will speak in this debate tomorrow, leads me to understand that the preschool sector now believes that any further significant creation of places will cause oversupply. As a result, the emphasis has shifted from capital funding for additional places to current funding with a view to improving the quality and accessibility of existing provision. While the early childcare supplement will be abolished from 1 January 2010, it will be replaced with a free preschool year in early childhood care and education, ECCE. This scheme has been widely welcomed by child care experts as a positive step in targeting support in a way that will directly support the child. Under the new ECCE scheme, services in the community and commercial child care sectors will provide a free preschool year to children in the year prior to junior infants, in return for a weekly capitation of €64.50 over 38 weeks. There will be five sessions of three hours' duration each week and services will be required to meet the standards set out in Síolta and Aistear. Síolta will have a co-ordinating role and the county child care committees will support the providers in meeting these standards. In cases in which a child attends full day care in a crèche, the Government will pay €48.50 weekly over 50 weeks in return for a 2 hour and 15 minute session each day, with a consequential €48.50 reduction in the child care fees charged of the parents. I am delighted the Government made the decision to introduce this new scheme. It will give equal opportunities to all children, particularly the most marginalised who would not otherwise be able to avail of preschool services. I believe the long-term benefits will be enormously significant to all our children and to society as a whole.

This new initiative represents an annual investment of €170 million in the provision of free preschool services and clearly demonstrates that, despite the current difficult economic environment, the Government is determined to maintain its commitment to the further development of early education and child care nationwide.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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The Government made savings on this scheme.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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This investment is in addition to the substantial funding provided under the community child care subvention scheme, which ensures access at reduced rates to quality child care for disadvantaged and low-income families. Arrangements are well advanced. When the scheme was announced, some Deputies on the Opposition benches claimed the sector would not be in a position to supply the required number of places. However, with a month to go, approximately 98,000 places are being offered by applicants, which is well in excess of the requirements. Some Opposition Members also argued against the scheme being free and argued that commercial preschools should be allowed charge fees from parents in addition to the capitation received from the Government, thereby limiting the benefits of the scheme to those who could afford to pay those fees. I am glad to note the Government held firm on this issue and the scheme will be widely available to children of all backgrounds, making the benefits of quality preschool accessible for all.

I also was pleased the Government was able to introduce a higher capitation fee of €75 under the scheme for higher quality preschools with more highly qualified staff. These services also will be available to children regardless of parental means and this will incentivise the sector into further up-skilling of its workforce. Further good news was available to the sessional preschools, representing 65% of participating services, when the Valuation Office announced ECCE-funded sessional services would be exempt from local authority rates from January as a result of being wholly or mainly funded by the State.

The Government has directed huge resources at both child and family income supports and at child care provision. Since 2000, it has increased the rate of child benefit to €166 for the first and second children and €203 for the third and each subsequent child per month. Overall expenditure on child benefit has increased to more than €2.5 billion. Income thresholds have been improved for the family income supplement with an increase in the number of families benefitting from the allowance. Extra moneys have gone to qualified child increases to ensure welfare dependent families and those benefitting from family income supplement get more to support their children. The Government has created tens of thousands of extra child care places and will introduce a free preschool year for all children.

Taken together, it is evident from these initiatives that the priority the Government has given to children has been unprecedented. The halving of consistent child poverty between 2003 and 2008 is a clear testament to the fact that its policies have delivered major improvements for low-income families in particular.

Child benefit is paid to all families, not just to those on low incomes. We appreciate it is important to all mothers and to different families for different reasons. The Government has carefully considered all the issues around child benefit carefully which will be reflected in our budget announcement.

Photo of M J NolanM J Nolan (Carlow-Kilkenny, Fianna Fail)
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I do not envy the Minister in the challenges which she and her Government colleagues face trying to frame the budget. It must be acknowledged that since the introduction of child benefit over 65 years ago there have been significant changes in its payment regime. Initially introduced in 1944 for a third and subsequent children, today child benefit, as it known, is paid for all children. The Minister is correct in reviewing the benefit, not just because of the budgetary situation the country faces but for calls for an overall review.

For many families, the household budget is framed around the salaries of the parents. Child benefit payment day also marks a significant date in the household monthly budget, particularly those which are restricted or on a low income. Mothers have always earmarked the payment for particular expenditure items, be it for children's clothes and footwear, school uniforms and books, and it is seen as an important part of their income stream. I hope this remains so.

However, I was particularly struck by the Minister's comment that for a family of four children, the payment of child benefit represents €738 per month or €8,856 per year. For a family in the high-income bracket and paying the higher income tax rate, this would represent an annual salary of between €17,000 and €18,000 in order to get a net payment of €8,800 per year. This must be taken into account.

One area not referred to in the debate so far is the abuse of claims. We hear anecdotally, particularly from constituents, of abuses in claims for child benefit, particularly in respect of those from Europe and overseas. They came to Ireland during the good times of the boom and were entitled to claim child benefit for their children in their home countries. Following the downturn in our economy, these individuals have returned home. Claims are made that they return to Ireland on a regular basis to keep their record to claim child benefit. I understand 7,000 EU nationals currently claim child benefit for 11,000 children living outside of the State. It might be worthwhile in this economic climate to examine that area of expenditure. It costs approximately €20 million a year for the State to pay child benefit for 11,000 children outside the State.

The April budget provided for €21.3 billion in social welfare payments for 2009, representing a 20% increase on the 2008 level. While much of that increase may be attributed to the significant increase in unemployment, there have been increases across all social welfare payments. This is put into context when one considers the State will borrow €26 billion this year, effectively 95% of social welfare expenditure. This is unsustainable. Changes have to be made and child benefit will be one of these areas. Some time ago, the Minister referred to a three-tier level of payment which could be examined. I am pleased to note the Government's decision will be informed by various interest groups such as the Society of St. Vincent de Paul and other voluntary organisations which have a particular interest in lower paid workers and low-income families.

The ESRI and the McCarthy report suggested a 20% cut to the benefit, which is a bit clumsy, while the Commission on Taxation recommended it should be taxed. All of these can be taken into the mix but I believe each individual family must be examined. The Department of Social and Family Affairs has streamlined its means test process. If PPS numbers can be tied in, there should be enough information in the Department to have an effective means test for social welfare payments without going to any more expense.

Many families are feeling the effects of pay cuts and job losses. This will bring the payment of child benefit to them more into focus. It is a challenge we have to face. The budget, currently being drawn up by the Government, will not be easy with no area of expenditure escaping. The tax generation side has been exhausted. From the increases in taxation introduced in the past year, we have seen a fall-off in the revenue stream. There will have to be changes in expenditure and I will support the Government on this.

The Government's amendment to the Private Members' motion states, "given the scale of the current economic crisis, failure to stabilise the public finances would lead to increased borrowing and jeopardise Ireland's ability to fund vital social services in future years". This must be recognised if we are to protect social welfare payments and be positive in our commitment to the less well-off. The Government will protect the country's finances to achieve this.

I accept the Labour Party's motion is well-intended and I see its merits. Knowing the individual Ministers in the Government I am confident that whatever decision is taken will be in the best interests of the country, and therefore, in the best interests of families.

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Fine Gael)
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I wish to share time with Deputies Connaughton and O'Mahony.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Is that agreed? Agreed.

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Fine Gael)
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I thank Deputy Shortall and the Members of the Labour Party for tabling the motion, which we, in the Fine Gael Party, support.

As a parent of a young family and from talking with many of my friends and constituents, I know the huge pressures that are currently being placed on families. Many of the additional pressures now being placed on parents is due to the financial difficulties in which they find themselves, as a result of the Government's mismanagement of the economy.

Child benefit has become a vital payment for every child in this country, a payment that many women rely on to help pay for child care, repay loans, meet ESB and gas bills, help out with the interest payments on mortgages, save for expensive occasions such as Christmas, holy communion, confirmation and children going back to school. That is the reality for hundreds of thousands of families throughout the country, not just those in the lower income brackets. Child benefit is a necessity, not a luxury, for thousands of households either in mortgage arrears, making rent payments, or trying to cope with large levels of personal debt.

Why should we penalise children living in households with a significant taxable income but with large debt levels and little or no disposable income? The suggestion that a graduated system of child benefit payments would be made to mothers based on the household taxable income fails to take into consideration the levels of indebtedness in family households. The Government has done little to support struggling families who have suffered from the downturn and are experiencing difficulty repaying their mortgages and household.

A means-tested child benefit system would create further financial barriers for many people who want to get off social welfare and back to work. There are more than enough anomalies without creating yet another incentive to give up work and move on to social welfare. Earlier speakers referred to unemployment traps. The McCarthy report, currently the Government's bible, highlights the issue of unemployment traps. It is important that the rates and benefits available under the social welfare system do not inhibit a return to work. For those of working age there are increasing indications that the level of welfare payments is creating disincentive effects for improved labour participation. An example is given of a Dublin-based couple with three children, aged four, eight and 11, who avail of benefits to the value of €23,000. With the addition of rent supplement the benefits could rise to approximately €35,500 per annum plus an additional €6,500 in child benefit payments. That would increase the gap that exists between people on social welfare and those who are willing to go to work by another €6,500, which would impose a further disincentive to people getting out of the social welfare system and back to work.

Even greater anomalies exist within the tax system. We have a taxation policy that gives greater recognition to bins than it does to babies. Fianna Fáil has developed a crazy tax system that recognises the cost of paying for refuse collection, but ignores the costs associated with raising children. Ireland is one of the few developed countries in the world that fails to give any recognition to children within the taxation system. Child benefit payments are therefore the only support provided to families to assist them with the raising of children. To add insult to injury, the Government intends to use the tax system to graduate the payment of child benefit, and to deprive families of those essential payments, but it is still not prepared to recognise costs such child care and the day to day costs of rearing children.

I welcome the Taoiseach's indication recently that pension payments will not be cut. Given that Fianna Fáil is largely to blame for the current economic mess, it is clearly wrong for the most vulnerable sections of society to pay the price by having their entitlements slashed. However, Fianna Fáil seems determined to undermine another section of society in need of State support, namely, children. The Government is showing every sign of slashing child benefit in the next budget.

I remind the Taoiseach that he stated recently that budgets were not simply about balancing books, important as that is. The Taoiseach said a budget was also about "acknowledging what we all see as important in society". Does that mean that the Taoiseach and his Government think more of refuse bins than they do of our children? Deputy Kenny has categorically stated that Fine Gael is committed to leaving child benefit untouched as thousands of hard-pressed families have come to depend on that direct payment.

More than any other party, Fine Gael understands the need to make savings in the forthcoming budget. It was the Government's irresponsible squandering of taxpayers' money during the boom that got the country into this mess in the first place. However, there are other ways to make savings than to slash child benefit. Fine Gael's budget approach is to stimulate job creation to get the country back on its feet and to target savings away from front-line services in order to protect both the young and the old in society. Child benefit is no luxury, it is an essential part of household income. Fine Gael will do all it can to ensure that children are protected.

We have long argued that the best way to reduce the social welfare budget is to get people back to work. Sadly, the Government has already accepted the fact that it intends to allow a further 72,000 people join the dole queues next year. Fine Gael, on the other hand, has a radical plan to transform the economy, make it competitive again and get people back to work. Our proposals, as set out the New Era plan would create 105,000 jobs. Getting that number of people back to work would save the Exchequer €2,100 million in a year. Not only that, but New Era would transform the economy by investing €18 billion over four years to make our broadband network among the top five in the world, turn us in to a net energy exporter by 2030 with 50% of our energy coming from renewable energy sources by 2020 and overhaul our water networks and infrastructure.

That comes on the back of plans to maintain 80,000 existing jobs in the small and medium enterprise sector. Fine Gael has outlined 18 different measures to support that plan, along with PRSI changes to support the employers of 1.7 million workers in the economy. There is not a man, woman or child in this country who is not aware of the depth of the challenges facing us. They are bigger than any one individual but the right policies can be used to tackle the issues head-on and provide us with what we need most, namely, jobs. There are ways of making savings in budgets if the Government has the will and the courage to deliver them. They require real reform and determination to succeed. Simply hitting front-line services or taking money off the most vulnerable in society with no plan to get people back to work is not acceptable.

The Government has proposed to either tax or means-test child benefit, which would involve huge administrative costs. The Revenue Commissioners are already struggling to cope with the changes to mortgage interest relief. The Department of Social and Family Affairs is struggling to cope with the processing of unemployment claims. The Revenue Commissioners who collect the taxes do not have the information on children to link it to the tax system while the Department of Social and Family Affairs does not have the detailed information on the taxation status of children's families to deal with the issue through child benefit. We are talking about creating an administrative nightmare that will cost as much as it will save.

The Government claims that its plans to cut child benefit are essential to making the savings it requires, but nobody should expect children to shoulder the blame for the Government's mistakes. Targeting the nation's children for savings is patently wrong and unfair. There are other ways of making savings in the social welfare budget, including measures such as eliminating fraudulent claims and by changes in Government spending, which would not represent a direct attack on one of the few payments made directly to parents for their children. Our children will play a vital role in Ireland's economic recovery. It would therefore be foolish, not to mention unfair, to penalise the very people on whom we will depend in the future.

Fine Gael is committed to not changing the child benefit payment, a payment on which thousands of hard-pressed families depend. I commend the motion to the House.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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I strongly support the Labour Party motion proposed by Deputy Shortall. I hope it will be supported and given consideration for implementation in the budget next week. As Deputy Naughten said, Fine Gael's position on child benefit has been clear for some time, that it should not be touched in the forthcoming budget. We recognise that savings must be made but we have outlined and will outline ways in which they can be made without interfering with child benefit.

I listened to the Minister's contribution and I support her in terms of the sensitivities and so forth that she will bring to this issue. However, the big issue for the people in my constituency is the fear of thousands of families in this country in which people have lost their jobs, are unable to keep up with mortgage payments or are working three day weeks. These people are suffering. As we approach next Wednesday the main fear for the old age pensioner is what will happen to the pension, while for families with children it is what will happen to child benefit. The safety cushion of the Christmas bonus for social welfare recipients has been taken away. They now fear the child benefit will also be taken away.

The parents of thousands of children will continue to do without themselves in these tough times but the single message they do not want to give their children is that they cannot provide them with the necessities, not the luxuries, of life. These could be clothing, Christmas presents or a pair of football boots a child needs to go to their local club for coaching. These are necessities for people, the things that are needed to prevent the creation of a greater divide in our society. All Members have heard the pre-budget submissions of various groups and organisation over the last few weeks. We have heard that the Society of St. Vincent de Paul is at breaking point due to the increased demands on the society. Most of those demands come from families with children, who cannot cope with the all the difficulties they face. If the society is unable to cope at present, how will it cope if child benefit is interfered with in next week's budget? It will be a step too far.

A number of groups in our society cannot speak up for themselves and need protection. Perhaps the Government holds the same view. The elderly would be considered one of them, although they certainly spoke up for themselves last year and made the Government change its mind about removing the medical card from the over 70s. Another group is people with disabilities and another is children. With regard to the elderly, the Taoiseach has already guaranteed that the pension will not be interfered with.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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He has not.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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That is what the country has taken from what he said. If he has other news on it, he should tell us.

This is not the first recession this country has experienced, although people will argue that it is the most severe. There have been booms and recessions many times in this country's history and child benefit has survived all of them. The Minister said that child benefit was introduced as an avoidance of poverty measure. If the Minister interferes with it in next week in the budget, she will reintroduce poverty to thousands of families.

Every Member of the House recognises that the people of this country are angry and afraid. The Minister said tonight that she wishes to be fair in how she deals with this issue. People are angry because there has been no fairness. If the Minister implements what she proposes in the budget next week, it will be a continuation of that.

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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The Minister has had much experience over the years with the matter I wish to discuss briefly, the historical significance of child benefit. I tend to call it children's allowance but that is because I have been around a great deal longer than others. I will take the historical point of view on this, even if some people might accuse me of being discriminatory. Of all the payments that have been made through social welfare or, indeed, from any other source, none has been as significant or beneficial as child benefit. The reason is that it was invariably paid to the mothers of Ireland.

In my experience, before there was a Celtic tiger economy and even since then, child benefit for many women is the only payment they can call their own. There are many women in this country, and they are not all in the lower income groups, who experience meanness on the part of their spouses, and in my experience there are many mean men. As a result, every month a huge number of women at every level is society have nothing else to count on aside from child benefit.

If a value for money audit of child benefit was carried out, I believe it would show that it gives the best value for any money paid by the State. It goes specifically to children, irrespective of their economic circumstances. Whatever else the Minister does next week, she must not interfere with child benefit. It would be a shocking thing to do. Even though they will not say it openly, I have made the case for people who, unfortunately for them, are tied into a situation whereby, irrespective of what income comes into the household, all they can claim as their own is child benefit. It should not be cut off. Is my time up?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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A few seconds are left.

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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I have much to say, but the Leas-Cheann Comhairle is being nice to me. Since the Celtic tiger, many women are working. This changed circumstances, since the child benefit went to pay childminders. No matter how one views the system, one must agree that the child benefit has been of considerable use to women.