Enda Kenny (Mayo, Fine Gael)
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Question 19: To ask the Minister for Social and Family Affairs the status of his plans to merge the family income supplement and child dependent allowance into a second tier child income support payment; and if he will make a statement on the matter. [7993/07]

Séamus Brennan (Dublin South, Fianna Fail)
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In the context of an overall review of targeted child income support payments, the National Economic and Social Council (NESC) was asked to examine the feasibility of merging the family income supplement with child dependant allowance and possibly including other child supports such as the back to school clothing and footwear allowance, resulting in a single second tier child income support. Such a payment would be aimed specifically at targeting child poverty by channelling resources to low-income families without creating significant disincentives to employment.

NESC has indicated that, as the proposed second tier income support represents a new approach to targeting, the issues involved are complex and there are technical and policy challenges to be overcome. The Council's analysis of these issues will, I believe, be of assistance in informing the future direction of child income support policy.

This commitment to examining such a change was subsequently embodied in the partnership agreement 'Toward 2016' which committed to completing consideration of the issues within one year.

While jobs are a most effective way of lifting families and their children out of poverty and child benefit accounts for 68% of child income support payment, I have long held the view that implementing a targeted second tier payment for children in low income and welfare families could have an important impact on child poverty. The significantly improved and targeted measures announced in Budget 2007 represent a substantial move in that direction.

Family income supplement income thresholds have been increased in Budget 2007 and improve the weekly payments of almost all existing FIS recipients by €9 for a one child family, to €111 for a family with eight or more children. Research has shown that poverty is more likely to be concentrated in larger families and this improvement continues the re-focusing of thresholds towards larger families which started in Budget 2006, thereby further targeting resources at low-income households.

In addition, in Budget 2007 all three child dependant allowance rates which had remained unchanged since 1994, were increased to a single rate of €22 per week.

These changes represent a more selective approach to child income support through targeting children in poorer households while at the same time limiting the extent to which employment incentives are worsened.