Mary Upton (Dublin South Central, Labour)
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Question 253: To ask the Minister for Social and Family Affairs his views on whether the recent increases announced in Budget 2008 will make a decisive impact on child poverty in view of the fact that the qualified child rate for social insurance and social assistance payments has only been increased by €2; and if he will make a statement on the matter. [35804/07]

Martin Cullen (Waterford, Fianna Fail)
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The reduction and eventual elimination of child poverty is a national priority and at the core of the strategic process to combat poverty and social exclusion, as set out in Towards 2016, the National Action Plan for social inclusion (NAPinclusion) and the social inclusion commitments in the NDP.

Children growing up in low income or jobless households are the most vulnerable to poverty. A high proportion of these households are composed of larger families with three or more children, and those headed by lone parents. As national and international evidence shows that employment participation is the main route out of poverty, the policy direction followed by successive Governments from 1995 to 2006 was to dedicate substantial resources to Child Benefit (CB). This process was intensified during the period 2001 to 2006 when an additional €1.27 billion was invested in the scheme, making child income support more neutral vis-À-vis the employment status of the parent and thus ensuring more parental choice in relation to working inside or outside the home in relation to retention of child income supports.

The shift towards CB has been substantial, from a position where Child Benefit represented 27% of the total CB/Qualified Child Increase (QCI) payment, to 63%. In other words, following the CB increases, a family will now lose only 37% of their child income support when moving into full-time employment. The advantage of this change is that, unlike QCIs, it does not contribute to unemployment or poverty traps. In addition, the introduction of the early child care supplement in 2006 in respect of all children up to six years of age has increased the overall level of child income support to all qualifying families, and proportionately more in the case of low-income families.

In the ten years from 1998 to 2007, CB rates have increased by 300% (lower rate) and 266% (higher rate). This compares with a consumer price index rise of 39.2%. In addition, the early child care supplement, which is payable in respect of all children under six years of age, provides a further €83.33 per month (paid quarterly in arrears). Budget 2008 provides for further increases payable in respect of all children. In percentage terms, these represent increases of 3.8% and 3.2% over 2007. When added to the increase of €100 per annum to the Early Childcare Supplement, the overall increases in relation to children under six years are €14.33 (lower) and €16.34 (higher) per month, percentage increases of 5.89% and 5.87% respectively.

While CB rates continue to increase, recent budgets have seen the concentration of additional resources on more targeted payments and specifically to families who are dependent on welfare supports, including family income supplement which is paid to low-earning employees with children. In this context, Budget 2007 provided for the first increases in QCIs since 1994, followed by the further increase which I announced in Budget 2008.