Taxing child benefit ‘not possible by budget’

It will not be possible to tax or means test child benefit payments in time for the next budget, Social Protection Minister Joan Burton has insisted.

The minister has floated the possibility of taxing child benefit for those earning more than €100,000 a year, but admits such a move could not be organised in the near future.

“Obviously, that would require having the capacity to join up the information technology of the Department of Social Protection and the Revenue Commissioners, and that would require a fair amount of work,” she said.

“But it’s something that has happened in other countries. I think it’s something we will be looking at but it’s certainly somewhat down the road and it’s not in the context of the current budget discussions.”

Ms Burton said taxing the benefit for the better paid would be preferential to means-testing the 600,000 families getting the entitlement, as the latter option would be very costly to administer.

The cabinet decided yesterday that the Revenue Commissioners would be put in control of the new, graduated property tax, which is set to replace the flat rate €100 household levy.

However, uncertainty remains about whether this can be introduced as planned next spring, or whether the flat rate will be charged again.

The Government was widely criticised for the complicated nature of payments for the charge, which helped in prompting more than four in 10 households to boycott paying it.

Proposals on the introduction date and rate of the graduated property tax are to be brought to the cabinet in the autumn.

Heading into the last cabinet session before the summer break, Taoiseach Enda Kenny admitted that ministers were “tired”.

The meeting had 70 items on the agenda, including Ms Burton’s plans to put the delivery of her department’s payments out to tender as required under EU law.

This could result in An Post losing its current role, with perhaps a supermarket chain or other network of outlets winning the contract to facilitate the delivery of social protection benefits.

The cabinet meeting also saw the transfer of responsibility for rent supplement payments from the Social Protection Department to local authorities, and a discussion of public sector pay allowances, but no decision was reached on the matter.

Ministers discussed preparations for the children’s rights referendum, which it intends to hold in the autumn, but no decision was taken as to the date of the referendum