Hanafin calls for debate on child benefit scheme
It has been a long-standing principle of the child benefit scheme that the payment is issued to all mothers, regardless of their means.
Ms Hanafin said that principle was worth debating as the Government considered ways of reducing the child benefit bill.
“Should every mother be recognised, as they have been since it was first introduced? That is a question that I think is certainly worth debating and worth looking at,” she said.
Ms Hanafin stressed that she had not arrived at a view on the issue herself, and therefore was not advocating that some mothers lose their entitlements.
But some analysts have suggested cutting the payment entirely for wealthy families. That would effectively be done by way of a means test, one of three options the Government is considering.
The second option is cutting the size of the payment. The current monthly rate is €166 for one child.
Bord Snip, the group set up to identify public sector savings, recommended a rate cut to €136, which would save the Government about €513 million a year.
The third option is to tax child benefit, meaning all families would continue to receive a payment, but it would be a smaller sum for high-income households.
Ms Hanafin said child benefit costs the Government €2.5 billion a year, and that bill would have to be reduced. But any cuts would be “targeted” to ensure the most vulnerable in society were not affected.
“Any decision that will be made in relation to child benefit will encompass looking to see how can we make the savings, but also to see how can we protect the most vulnerable and to ensure that we don’t create a disincentive to work for people. So I’ll be looking at it in that context,” she said.
“The Minister for Finance has already indicated that it would be taxed or means-tested. The McCarthy (Bord Snip) report said it should be cut. All those three elements are being looked at – none of them is easy.
“None of them we relish having to do.”
