Written answers

Thursday, 9 July 2009

Department of Social and Family Affairs

Child Support

12:00 pm

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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Question 650: To ask the Minister for Social and Family Affairs the plans to tax or means test the child benefit payment; and if she will make a statement on the matter. [29899/09]

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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Question 651: To ask the Minister for Social and Family Affairs the estimated cost of means testing the child benefit payment; and if she will make a statement on the matter. [29900/09]

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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Question 690: To ask the Minister for Social and Family Affairs the progress in relation to the Programme for Government commitment to amalgamate qualified child allowances and family income supplements in order to develop a second tier of income support targeted at the poorest families; and if she will make a statement on the matter. [29944/09]

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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Question 691: To ask the Minister for Social and Family Affairs the status of the Programme for Government commitment to continue to increase child benefit; and if she will make a statement on the matter. [29945/09]

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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Question 704: To ask the Minister for Social and Family Affairs the estimated cost of means testing the child benefit payment; and if she will make a statement on the matter. [29958/09]

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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Question 705: To ask the Minister for Social and Family Affairs the revenue which would be raised from applying income tax to child benefit; and if she will make a statement on the matter. [29959/09]

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take questions numbers 650, 651, 690, 691, 704 and 705 together.

As the Deputy will be aware, the 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. Overall expenditure on child benefit grew from just under €965 million in 2001 to nearly €2.5 billion in 2008 as a result of these rate increases and growth in the number of eligible children. The Government was able to direct 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 either subject child benefit to income tax or means-test it from 2010. The issues arising from which approach to adopt are considerable. In view of the complexities associated with the two options, the Commission of Taxation is currently examining the issues arising and their report will inform the Government's final decision on how best to proceed.

In relation to the Deputy's question regarding the costs of a possible means-testing of Child Benefit, this would depend on a range of factors including the range and complexity of income sources to be tested and the manner of how this would be implemented in practice.

The Programme for Government provides for the amalgamation of qualified child allowances and family income supplements in order to develop a second tier of income support targeted at the poorest families. The NESC Secretariat was asked to examine the issues and develop proposals for a second tier child income support scheme. However their research paper raises a number of significant issues which were not resolved by the NESC. These issues will be considered in the context of the future direction of child income support policy which is being kept under review by my Department.

As with the Programme for Government generally, any further improvements in the level of child benefit payments would have to be subject to overall budgetary resources.

The question of the amount of revenue to be raised from taxation of the CB payment is a matter for the Minister for Finance in the first instance.

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