Jan O'Sullivan (Limerick East, Labour)
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Question 116: To ask the Minister for Social and Family Affairs the estimated administrative cost of reforming child income supports by amalgamating qualified child additions with family income supplement; the discussions she has had with the Department of Finance regarding the possibility of partly facilitating this move by introducing refundable tax credits; and the level of engagement between the two Departments on this issue. [24775/08]

Jan O'Sullivan (Limerick East, Labour)
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Question 127: To ask the Minister for Social and Family Affairs the Government policy on reforming child income supports by amalgamating qualified child additions with family income supplement; the action she will take in this regard; and the timescale she is working to. [24774/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take Questions Nos. 116 and 127 together.

In the context of social partnership The National Economic and Social Council (NESC) was asked to examine the feasibility of merging the family income supplement (FIS) with the increase for qualified children (IQC). While NESC failed to reach a consensus on this issue, a research paper by Dr. John Sweeney was made available late in 2007 as a contribution to the debate. This included a proposal to abolish both FIS and IQCs in favour of a new means-tested payment, estimated by Dr. Sweeney at a net (additional) annual Programme cost of €775 million in 2006 terms. Such a payment would be distributed where appropriate by means of a refundable tax credit, and otherwise by cash transfer. Consideration of this scheme would raise a number of policy issues as well as posing significant administrative challenges.

In view of the above, an examination of existing selective child income support measures is underway in the Department, adopting a two strand approach which includes an analysis of families already receiving FIS and an examination of qualifying families who may qualify for FIS but have not applied for payment and the underlying reasons for their failure to avail of FIS. The results of this study are expected to be available later this year. This review, together with consideration of the issues raised in Dr. Sweeney's discussion paper, will inform future policy in this area. In considering any change, all policy, administrative and cost implications would, of course, be fully taken into account. In developing future policy in this area it is important to keep in mind the multiple objectives behind the provision of child income support and to maintain the correct balance between broad based supports such as child benefit and more targeted supports such as FIS and IQCs.