Séamus Brennan (Dublin South, Fianna Fail)

I thank the Senator for raising this issue. If even one child in this country lives in any kind of poverty, it shames us all. Progress must be made to ensure this cannot continue. I have said many times that it is unacceptable in the 21st century that even one child should live in any kind of poverty in a country whose economy grew last year by 7%, the highest rate in almost any developed country in the world. This was an astronomical rate of economic growth and progress and it behoves us to channel and target funds. This is why, in the budget, the Minister for Finance, Deputy Cowen, and I specifically targeted income support costing more than €240 million to benefit children in low-income families and families on social welfare. This is why we dramatically improved the old child dependant allowance, which Senator Terry rightly notes is now called the qualified child allowance, and the back to school clothing and footwear allowance and channelled resources to low-income families in particular.

We could have increased child benefit across the board. Instead, we specifically targeted additional funds of more than €60 million at the lowest one third of children in terms of income. This was the first time in 12 years this shift happened and it is one which I believe is required.

I am fully committed to a second-tier payment. The National Economic and Social Council has been examining this for a long time and has told me it is very complicated and complex because there are poverty traps, points at which one comes in and out of the system and disincentives which can be built into it. I decided not to wait for this process to be completed. Instead, the Minister for Finance and I decided to channel approximately €60 million at the lowest one third of children in terms of income. Instead of introducing an across-the-board increase in child benefit, which has been the pattern for 12 years and did much good work, I felt strongly that the time had come to say it was not necessary to go all the way across the board with those funds and that we should target a disproportionate amount of them at the lowest one third of children on that ladder. This began in January of this year. It is not something that has been committed; it is working and those funds are being paid weekly to those families.

As the Senator knows, we have increased family income supplement thresholds dramatically. The family income supplement scheme provides a considerable amount of funds for low-income families. We have substantially increased the thresholds this year. As I am sure the Senator is aware, we have undertaken a promotion campaign to encourage more people to apply for that payment and, consequently, there has been a significant increase in the numbers of people applying. At present, 21,000 families are in receipt of family income supplement, which benefits 43,000 children.

Child poverty is predominantly located in the overlap between the lone parents allowance and family income supplement. This is why we specifically targeted the thresholds, the family income supplement incomes and did not increase child benefit across the board. While some of the increases were implemented across the board, we targeted a substantial amount of funds at the bottom rate.

In budget 2007, the old three child dependant allowance rates were increased and consolidated into one rate of €22. This represents a more selective approach to child income support, targets poorer households and, at the same time, limits the extent to which employment incentives are worsened.

Incidentally, child benefit is paid to more than 560,000 families in respect of approximately 1.1 million children. I do not disagree with the Senator's analysis, except to indicate that whoever has the responsibility of Government or the responsibility of having been elected to this or the other House must ensure resources and funds are channelled into areas where they can make a difference to the lives of people rather than being spread too thinly across the board. This is what the Minister for Finance and I did in the recent budget and this work must continue.