Enda Kenny (Mayo, Fine Gael)
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Question 340: To ask the Minister for Social and Family Affairs her plans to introduce means testing or a taxation method for child benefit; and if she will make a statement on the matter. [25777/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Since 1944, Child Benefit has been a key instrument in child income support policy with the main objectives of supporting families in the costs of rearing children and the alleviation of poverty. Rates of child benefit have increased significantly since 2001 having trebled for the first two children and increased by over 185% for the third and subsequent children. Partly as a result of this and partly as a result of an increase in the number of eligible children, overall expenditure on child benefit grew from just under €965 million in 2001 to almost €2.5 billion in 2008. The Government is proud to have been able to direct such substantial increases in financial support to all Irish families in recent years. However, given the scale of the current economic crisis, it is necessary to address all aspects of the public finances so as to avoid excessive borrowing and to ensure that fairness exists in the allocation of resources.

It was in that context that the Minister for Finance announced, in the Supplementary Budget, the Government's intention to subject child benefit either to income tax or a means-test from 2010. The issues arising from which approach to adopt are considerable. I understand that the Commission on Taxation is considering the issues underlying the possible taxation of child benefit and the Department's officials have met with them on this matter. The Commission's deliberations will inform the Government's final decision on how to proceed. The Department, together with the Department of Finance and the Revenue Commissioners, are currently giving the matter careful consideration in anticipation of the report by the Commission on Taxation.