Universal cut in child benefit looms as Cabinet faces hectic budget talks

An across-the-board cut in child benefit is looming in next week’s budget.

Government sources said the €2.1bn welfare payment cannot be taxed or means-tested at present, and so a general reduction was in the offing.

Such a move would prove highly controversial as the Government has repeatedly stressed its intention to protect “core” social protection benefits.

A senior Government source said: “It would be very surprising if child benefit is left alone, it is the big stand-out item and many people have called for that to be looked at.”

Social Protection Minister Joan Burton has said everything is on the table as the Government seeks €3.5bn worth of cuts and tax hikes in the Dec 5 budget.

Ministers have made it clear they would like to tax child benefit to ensure it is targeted at more needy families, but Revenue is not equipped to deal with the complexities of such a move at the moment.

The Cabinet is to finally begin a week of hectic discussion of the budget. It is not formally on the agenda for today’s meeting, but a special session is planned for tomorrow.

In order to prevent the rash of leaks and kite-flying exercises that marred the run-up to last year’s budget, discussion so far has been kept to the Economic Management Council, which is made up of Taoiseach Enda Kenny, Tánaiste Eamon Gilmore, Finance Minister Michael Noonan and Public Expenditure and Reform Minister Brenda Howlin. They are expected to meet at least twice this week.

Labour TDs believe they will be able to force through a rise in the Universal Social Charge from 7% to 10% for those earning over €100,000 per year to bring them into line with the self-employed.

However, it now appears the rate will also increase to 8% for those earning below that threshold.

Campaign groups have stepped-up criticism of any attempt to cut free travel for pensioners.

Energy Minister Pat Rabbitte said he expected the budget to come before Cabinet. “It’s not formally on the agenda. But there are frequent abrogations of the rule where you discuss only matters that are formally on the agenda. So one would never know.”