Proposed new child benefits capping payments for the better off would worsen the lives of struggling families, a leading anti-poverty group has warned.
The Society of St Vincent de Paul (SVP) has rejected a two-tier system to limit automatic top-ups to those on social welfare or for families with incomes up to €25,000.
The group is also unhappy that the universal rate would be cut from €130 to €110 per child per month, on the back of other welfare cuts since 2009.
“€25,000 is a low level of income for a family. We’re not saying the idea should be thrown out immediately but lets look at the changes and how they impact,” Caroline Fahey of the SVP said.
“The threshold is the issue, maybe it should be increased to the average industrial wage, around €35-€40,000.
“The state cuts to child benefit have already been hugely damaging to families in need.”
Under the child benefit review families will only qualify for the maximum top up if they earn less than €25,000.
Every family would get €110 a month per child, down €20 on current rates, with top-ups for poorer families as high €38 a week – this second tier would taper according to how much a family earns over the €25,000 threshold.
Payments would run in brackets with basic rates kicking in when incomes hit €34,935 for a one child family; €44,870 for two children; and €54,805 for three.
The review found it is possible to tax child benefit but opted for a two-tier system instead because it offers a deeper reform of the benefit.
The proposals would save the state €200m a year.
Tanya Ward, chief executive of the Children’s Rights Alliance, said the money from any savings should be reinvested in national childcare.
“Maintaining the universality of the payment is critical and introducing a top-up for families on low income is essential to address child poverty,” Ms Ward said.
“However, every time the Government has cut child benefit, much of it has been lost to children and families. Any proposals for reform must reinvest the funds in a fit for purpose national childcare system.”
The reforms would involve the minister abolishing Qualified Child Increases paid to social welfare recipients and Family Income Supplements (FIS) for those with low earnings.
SVP said the changes will likely hit FIS recipients hardest – the families who are working and living on low wages.
Taoiseach Enda Kenny said: “The advisory group were very clear on one fundamental issue and that was the importance of the universal payment.
“The universal payment is fundamental.”
Child poverty is increasing with 18.8% of children at risk of poverty and 9.3% in consistent poverty, the SVP said.
It also said that two thirds of children in Ireland are living in a household earning less than €60,000 a year and only a fifth are in homes with earnings over €80,000.
Joan Burton, Social Protection Minister, said she defends universal child benefit because the state must value every child and support families.
“The fact that every family receives Child Benefit, regardless of their employment status, also ensures that there is not a disincentive to work,” she said.
“This report makes important recommendations on how child benefit could be maintained as a universal payment while reforming child and family income supports so as to better target those who need them most.”
It is estimated that if the reform plan is accepted it will take 18 months to implement.
The plan was devised by the Advisory Group on Tax and Welfare chaired by Ita Mangan.
At present the state spends €2.8bn on supports to families and children through payments such as child benefit, the Family Income Supplement, Qualified Child Increases on weekly social welfare payments, and the Back to School Clothing and Footwear Allowance.