Wednesday, 23 November 2011
Social Welfare Benefits
Question 8: To ask the Minister for Social Protection her views on the importance of the role played by universal child benefit in tackling child poverty to date; and if she will make a statement on the matter. [36255/11]
Child benefit assists parents with the cost of raising children and it contributes towards alleviating child poverty. Expenditure on child benefit for 2011 is estimated at €2.08 billion in respect of some 1.133 million children. The Government is conscious that child benefit, as a universal payment, can be an important source of income for all families, especially during a time of recession and high unemployment. The social protection system also provides assistance to low income families with children through the payment of qualified child increases on primary social welfare payments and through the family income supplement payment.
In November of last year, the Department published a policy and a value for money review of child income support policies and associated programmes. The review examined the effectiveness and efficiency of child income support payments in meeting policy objectives over the period 1997-2010, including the provision of targeted assistance to families at risk of poverty. The review indicated that child poverty fell, particularly at times when the level of universal support was increased, and that child income support payments, including child benefit, contributed to this reduction. However, the report indicated that better outcomes could be attained through rationalising the current system of child income support payments and selective programmes in particular, in order to provide more consistent assistance to low income families and to encourage parental employment.
The ESRI has also separately assessed the progress on the reduction of child poverty over the period 2004-07 and found that young children under the age of five, children in large households and children in lone parent households experienced substantial declines in their risk of poverty. It is suggested that this pattern of the decline in poverty can be attributed in part to developments in child income support policy, including the increase in child benefit rates over the period.
Additional information not given on the floor of the House
The value for money review noted that the provision of effective and efficient supports to families with children is only one part of an adequate and comprehensive strategy for addressing child poverty. Tackling child poverty is a priority for the Government and a key goal of the National Action Plan for Social Inclusion 2007–2016, NAPinclusion. Factors contributing to childhood poverty include living in lone parent households, labour market inactivity of parents, low parental educational attainment and living in households dependent on income supports.
The broader issue of family and child income supports is currently being examined by the advisory group on tax and social welfare, which I established in June of this year. The group has been tasked with recommending cost-effective solutions as to how employment disincentives can be improved and better poverty outcomes achieved, particularly child poverty outcomes.
We heard comments before the last election and recently in the media about the issue. Does the Minister still agree that child benefit is the sole universal benefit, should be protected as such and should not be reduced? Does she agree that the fairest and simplest method is to give child benefit for every child at the same rate and use the tax system to recoup from wealthy parents? For example, we propose to introduce a third rate of income tax on individuals or a wealth tax.
I have previously advised Deputies that I established an advisory group or commission on tax and social welfare in June this year. The first issue the group has been tasked with is to recommend cost-effective solutions to employment disincentives and achieve better poverty outcomes, particularly child poverty outcomes. As I indicated to the Deputy there has been a number of reports, with one from the Department and one from the ESRI, examining how to retain the core value of universal child benefit. If I may make a gender-based remark, those who want to abolish universal child benefit are generally men, and women are not usually consulted. The payment is generally made to women, who appreciate it. The group will report by the end of next March and I hope we will find a way to retain universality of payment while finding methods of consolidating the other payments relating to children, such as the child dependant allowances and family income support. They must become more coherent.
There have been recent reports on the issue and comments by various members of the Minister's party. There is also a reference in the programme for Government and comments were made by the Tánaiste, Deputy Gilmore, on the occasion of 100 days in office and when Deputy Nulty entered the House after a successful by-election in the Minister's constituency. In light of these, will the Minister confirm that the Labour Party insisted on Fine Gael dropping its demands to reduce the benefit before entering into negotiations for the programme for Government?
Does the Minister agree there should be absolutely no reduction in child benefit, particularly in light of significant increases in the burdens on families by means of electricity and gas charges and reductions in gas and electricity allowances in the home care packages? The figure for children in poverty will increase from approximately 90,000 to 130,000. Research from the European Anti-Poverty Network in Ireland indicates that far from being overly generous, the spend on social welfare here is the third lowest in a group of 15 European countries.
Did the Labour Party give commitments prior to the election about not touching child benefit because it knew it would be wrong to attack the benefit? Does the Minister agree that the only consequence of cutting child benefit would be to increase child poverty and hit the most vulnerable sectors of society? Is it a red herring to speak about a few wealthy people benefitting from the payment when the majority of recipients are working, poor and vulnerable people who need it? If the Minister is to deal with wealth inequalities in our society, she could do so by imposing higher income taxes on the wealthy rather than cutting child benefit.
I stated already that I recognise the value of the universal payment, which is one of the few universal payments in the Irish welfare system. It is particularly valued by those parents providing the care, which is usually the mother, although there are increasing numbers of fathers parenting on a full-time basis. In reforming child benefit we must achieve a targeted system that will utilise a universal payment while regarding other payments, such as child dependant allowances and family income supplement. We must achieve the best of both systems but, importantly, provide a very clear path for parents to be able to be in employment while continuing to receive a level of support.
I acknowledge that some people have indicated they do not require child benefit. They can certainly volunteer to surrender it to the State. People who have held office have done this and I did so during the course of the last Dáil. It is possible to surrender unwanted State payments and salaries to the Minister for Finance. It should be possible for people to surrender the payments if they so wish.