Spend child benefit savings on childcare, TDs told

The head of a Government-appointed advisory group on tax said millions of euro in potential savings from reforms of child benefit payments should be spent on childcare and service supports.

However, it is worrying that half of Ireland’s children were living in households in receipt of social welfare, warned group chairwoman Ita Mangan.

The head of the advisory group on tax and social welfare said 14% of the €20bn department budget would go on child benefit payments this year.

Ms Mangan outlined results from a report on reforming the allowance, which put forth a preference for a two-tier payments system for families rather than taxing the benefit. The report, produced for Social Protection Minister Joan Burton, was released last month.

Ms Mangan told the Oireachtas committee on social protection yesterday it was her personal opinion that savings recommended under the proposed child benefit reform should go on childcare.

Responding to a question from Labour TD Brendan Ryan, she said she “would be extremely happy” if all savings were targeted at childcare and supports, but this matter had not been part of the group’s remit, she said.

Mr Ryan said the lack of affordable childcare was a “major barrier” to single parents working.

The report found that savings of €200m would be made if universal payments continued, but only a top-up fund was given to poorer claimants. Savings of €300m could be made if the benefit was taxed, but this faced legal difficulties and could adversely hit the lower paid.

The Government have yet to make a decision on the group’s proposals, said department of social protection assistant secretary general Teresa Leonard.

Fianna Fáil’s Willie O’Dea said the plans could hit the “squeezed middle classes”.

Ms Mangan told senators and TDs that 47% of the country’s children were living in ‘welfare’ households, describing it as “worrying”.

Ms Mangan said future restrictions on child benefit would not hit most of these children. The solution was not what type of payments households received, but rather how to get people in employment and off welfare, she added.

The advisory group head also said that one-in-five youngsters lived in a home where income was less than €20,000 a year.

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