Child benefit tax ‘for those who can afford it’

MOTHERS should continue to receive child benefit with the tax applying only to those who couldafford it, Social and Family Affairs Minister Mary Hanafin said last night.

She said she could understand why an organisation like the National Women’s Council of Ireland would be against means testing or taxing child benefit.

“If you interfere with a universal payment, of course that impacts on people. We have seen that before but, in the times we are in, it is really important that we are fair and we try to take as much money from those who can afford to pay rather than those who can’t,” she said.

The minister said the state was spending e2.5 billion on child benefit this year, 10% of the social welfare budget.

“It was important that we did not cut it this year in order not to unjustly penalise people who are using it for child care costs or to support families that were more disadvantaged,” she said.

Ms Hanafin said the question of whether the benefit should be taxed or means tested would be considered by her department and the Department of Finance after the final report of the Commission on Taxation was published in the autumn.

If the benefit was means tested, 640,000 mothers would have to be assessed for the payment and that would pose a huge administrative difficulty, she said.

However, she had no personal opinion as to the income level at which the benefit should be taxed.

She also admitted that a number of issues could arise, particularly on how the income earner, or earners, was determined.

Ms Hanafin also revealed that child benefit was now being targeted in a series of anti-fraud measures.

While people working in Ireland who have children living outside the country were entitled to claim child benefit, there was some evidence of people who were still claiming child benefit after leaving the country.

“We will have to clamp down on that,” she said.

The NWCI’s acting director, Orla O’Connor, said means testing or taxing child benefit should not be introduced until there was a fully subsidised quality childcare infrastructure in Ireland.

Barnardos director of advocacy,Norah Gibbons, said they were worried about poorer families where child benefit had become part of their income.

If the benefit was to be taxed or means tested, Barnardos would be insisting that the money saved was used to increase the qualified child allowance, which is paid to children whose parents are dependent on social welfare payments.