Further cutback in child benefit looms

FEARS of a further reduction in child benefit have increased after Children’s Minister Barry Andrews refused to rule out cutting the payment in the upcoming budget.

But children’s charities have warned against putting the squeeze on families already struggling with rising costs, debts and uncertainty about their future.

“It’s stealing money from children to pay bankers and bondholders,” said the Children’s Rights Alliance.

Mr Andrews said last year’s budget cut of €16 per month per child, which has saved €182 million so far, was only the start of a review which could ultimately mean the payment being taxed or means-tested, with higher income families getting reduced or no benefit.

He told radio station Newstalk: “It’s very hard to justify a situation where high earners are receiving child benefit on the basis of tax paid by people on much lower incomes.” The minister did not specify what constituted “high”.

Mr Andrews made his comments as the British Chancellor of the Exchequer announced he would cut child benefit for higher earners from 2013.

“I understand where George Osborne is coming from,” Mr Andrews said.

In Britain, the eldest child in a family receives €100 a month while subsequent children get €65 each compared with €150 for each of the first two children in Ireland with higher amounts for subsequent children.

But Jillian van Turnhout, chief executive of the Children’s Rights Alliance, which represents 90 charities working with children, said there was no comparison between the two countries. “In Britain, children have free healthcare, free education, including schoolbooks and copies, and means-tested school meals. There are also child tax credits. You’re not comparing like with like.”

Ms van Turnhout said she had no difficulty with the rich being asked to contribute more to the state coffers but said cutting child benefit would hurt more people than it would help.

“This is the only safety net that families have. For families with uncertain earnings it’s the only regular, dependable payment they get and it’s the only payment that is not stigmatised,” she said.

“If the Government doesn’t like the idea of rich people getting too much then why don’t they use the taxation system and tax them more? It’s fairer and far simpler than getting into means-testing, which would be an administrative nightmare and cost too much to implement.”

The minister referred to Finance Minister Brian Lenihan’s emergency budget in April, when he warned: “The Government does not think that it is fair to pay the same level of benefit irrespective of the level of income of the recipient.

“For that reason, the Government has decided that child benefit will be means-tested or taxed in the budget for next year.”

Mr Andrews said the issue would be on the agenda for the Cabinet talks in the run-up to the December budget. “I would agree with mr Lenihan that it’s something that needs to be looked at,” he said.