Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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To ask the Minister for Social Protection if she will list the changes introduced to child benefit payment since March 2011; and if she will demonstrate the way that these changes have reduced child benefit. [11640/13]

Joan Burton (Dublin West, Labour)
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In 2013 the estimated expenditure on child benefit will be approximately €1.9 billion to around 609,000 families in respect of some 1.16 million children. Child benefit is a monthly payment made on a universal basis to families with children in respect of all qualified children up to the age of 16 years. The payment continues to be paid in respect of children up to their 18th birthday who are in full-time education, or who have a physical or other disability.

Budget 2012 maintained the child benefit rate for the first and second child at €140 per month. The monthly rate for the third child was reduced to €148 and for the fourth and each subsequent child to €160. Budget 2012 also provided for the discontinuation of the grant for multiple births but we have continued the premium payments of 1.5 times the standard rate for twins and twice the standard rate for other multiples. Budget 2013 made further reduction in child benefit rates to €130 for the first, second and third child while the rate for the fourth child and subsequent children was set at €140. Budget 2013 also provides for child benefit rates to be standardised at €130 for all children from January 2014.

It should be noted that despite recent reductions in the child benefit rates, the current rate compares favourably with rates in, for example, 2002 when the lowest rate was €117.60 or 2005 when the lowest rate was €141.60.

Notwithstanding these changes, our expenditure and payments on child benefit remain among the highest in Europe. Since becoming Minister for Social Protection, I have strongly defended the universality of child benefit because the State must value every child and support families. Also, the fact that every family, regardless of their employment status, receives child benefit ensures that in the current system there is not a disincentive to work.

Additional information not given on the floor of the House

Unfortunately, it has not been possible, given the level of adjustments required, to exempt income support to families from the general budgetary strategy. Although these measures are primarily designed to reduce overall public expenditure with a view to restoring stability to the public finances, some of the savings have been redirected towards services targeted at low-income families. The Children Plus Initiativeprovides for an increase of €2 million for school meals, €14 million for after-school child care and €2.5 million for an area-based child poverty initiative. The reasons for child poverty are multifaceted. Factors contributing to child poverty include living in lone parent households, labour market inactivity of parents, low parental educational attainment and living in households dependent on income supports. Therefore, a multidimensional approach is required to address this issue, including not only child income supports but child related services.

On reductions in child poverty, the redistributive effect of social transfers, including child and family benefits, can be observed in the at-risk-of-poverty rate for children set out in the Central Statistics Office survey on income and living conditions reports. Although it is not possible to isolate the poverty reduction effect of child benefit only - it is included with all other social transfers - the impact of social transfers in reducing child poverty is quite substantial.

During the period 2004 to 2010, which is the period for which the most recent data on children are available, the poverty reduction effect of social transfers rose continuously from 43% to 62%. The most recent CSO data show that in 2011 social transfers reduced the overall at-risk-of-poverty rate for the total population by 60%. Despite economic difficulties, of which people are aware, we have maintained payment to families at a very high level. An estimated €1.9 billion will be paid to around 609,000 families in respect of some 1.16 million children in 2013.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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My reason for tabling this question is the Labour Party's promise to the electorate not to reduce child benefit. We all know how the Minister, Deputy Rabbitte, views election promises. It appears one can promise whatever one likes in election campaigns. The Government gave a commitment to protect the most vulnerable in society. It is evident from the figures which the Minister has just read into the record that, in terms of cuts in the 2012 and 2013 budgets, it is not living up to its election promises or its programme for Government.

I call on the Minister to give a commitment that child benefit will not be further reduced in the forthcoming budget and to set aside the Mangan report, which has been sat on for the past year and guided the cuts implemented in this year's budget. Does the Minister not understand the increasing distress being caused to families, in particular working class families, across this State owing to the depth of the current crisis? Child poverty is increasing and the cuts in child benefit, rather than being ring-fenced to help children, are part of an overall budgetary cut which is compounding the distress of many families in this State.

Joan Burton (Dublin West, Labour)
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On the Deputy's points regarding poverty, during the period from 2004 to 2010, which is the period for which the most recent data on children are available, the poverty reduction affect of social transfers rose continuously from 43% to 62%. As far as I am aware, although we do not yet have the detailed statistics, this has continued. As I said, our direct payments in cash to families with children, notwithstanding the severe economic difficulties in this country of which the Deputy is aware, continue to be among the highest in Europe. This is a considerable tribute to taxpayers in Ireland who have funded and continue to fund a high level of payment to families with children. There is a general recognition in society that families with children should be supported.

On whether it has been possible to avoid all reductions, unfortunately, it has not. When this Government took office, its predecessor had already invited in the IMF which had set in place a stringent structure in terms of how the budget would be dealt with and the conditions on which it would lend us money so that we could pay for social transfers such as child benefit, public servant salaries and health and education. The situation is difficult, although we are now emerging from it. Deputy Ó Snodaigh appears to have the luxury of being able to ignore the difficulties and the necessity to borrow on strict terms from creditors who have required certain cuts. I am surprised the Deputy is not aware of this.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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It is not a luxury. Sinn Féin has been positive and progressive in terms of how this aspect of our finances could be addressed. While we have put forward proposals, the Government has chosen to ignore them.

Does the Minister not understand the contradiction in her position? She stated the positive effect of social transfer has increased, but the very fact she is cutting one of these social transfers gives lie to what she states. It will now have a negative impact instead of the positive impact she mentioned. Does she not understand the illogical position she has adopted in this case? Child benefit should be ring-fenced. Child poverty is addressed not only through this mechanism but through other mechanisms also, some of which the Minister has come to of late.

Joan Burton (Dublin West, Labour)
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We should recognise it is to Ireland's credit that we pay such high levels of social welfare payments and it is the single greatest factor in reducing the risk of poverty. Unlike some very well-off European Union countries where the average effect of social transfers is to reduce poverty by approximately 40%, in Ireland the actual reduction through social transfers of the risk of poverty is approximately 60% to 62%, simply because of these very high levels of payments.

If the Deputy is suggesting, as he seems to be, that the Government had the luxury of ignoring the financial crisis we inherited and not providing for sustainable reform of the public finances then I must say the position of his party is a little fantastical because we needed to borrow, and unfortunately still need to borrow, significant sums. I do not know any economist who has been able to suggest a way of the State not borrowing these sums and continuing to pay for health, education, social protection, all other necessary public payments it makes and pay the public servants it employs. I am taken aback at the economic analysis the Deputy has set forth. His unstated suggestion is that somehow or another the country would default and that we would have difficulties which other countries have experienced. While it has been very difficult for many people in Ireland, we are managing to bring the country back to a sustainable recovery path which is why recently we have had the first growth in employment in this country since 2008.