Children’s allowance is subsidising people to have sex, says O’Leary

RYANAIR chief Michael O’Leary believes children’s allowance should be scrapped as it is subsidising people to have sex.

He said money should be channelled to people on low income but that giving it to everyone just because they have children was “absurd”.

Mr O’Leary, who was speaking in Ireland West Airport Knock in Co Mayo, where Ryanair announced four new routes to Paris, Frankfurt, Milan and Barcelona, said that it was a waste of money giving children’s allowance to people who did not need it.

“This broad band of just giving everybody children’s allowance — it’s like the Government subsidising people to have sex. Now, I don’t know about you, but I’m very happy to have sex for free, I don’t need a subsidy for it.

“I think scrap it for everybody. There are clearly people on lower incomes and you need to channel children’s allowance to them through income support schemes, single parent allowances where you’re trying to target money at people on very low incomes.

“We’re borrowing €1.3 billion from European banks and European governments so that you can pay my wife four amounts of children’s allowance when I clearly don’t need it. I think it’s absurd.”

His thinking, in relation to ending the payment of child benefit to high earners, echoed separate comments from a former member from the Commission on Taxation who accused the Government of a lack of imagination on the issue.

Eoin Fahy, chief economist with Klinewort Benson Investors, said the only arguments against immediate reform of the system were “hassle, paperwork and cost”.

He said when the budget for the programme was €2bn, the state could afford the upfront cost of means-testing because it would deliver justifiable savings. “There are many families, not most, who literally wouldn’t notice the €10 cut in child benefit, the relatively well off at upper end of at middle class and above”.

He did warn however that legal complications exist around means testing and taxing such as “who owns the money as according to some legal opinion this could be the child”.

Further legal challenges can emerge, he told Newstalk Radio, if the parents aren’t married or separated as you have to decide who to means test or tax. However, he said you could split it along percentage terms, based on custody of the children, if a couple were separated.

Other countries, he said, have much better integration of tax and welfare systems, which enables taxation or means testing.