Child benefit - Reform must tackle inequalities

Few people will dispute the urgent need for radical reform of the inequities of a child benefit system that gives the children of the poorest families in Ireland the same level of support as the children of millionaires.

There should now be meaningful debate on this issue, one that profoundly affects the well-being of thousands of families, following yesterday’s publication of the Mangan report on child benefit and taxation. The question that has to be asked is why the Government has been sitting on this important document, as alleged by Limerick TD Willie O’Dea.

Written by experts at the administration’s request, the report appears to have suffered the fate of many another document, languishing on a ministerial shelf and gathering dust for almost a year. Now finally in the public domain, let us hope it will be implemented.

The importance of the Mangan report is that it represents the first serious attempt at reforming the blatant inequalities of the system. Basically, it looked at how child benefit is currently paid and analysed the complex questions of taxation and social welfare.

Its focus was on how greater benefit can be delivered to poorer families and whether or not child benefit should be taxed. The experts have come down on the side of a two-tier system of child income supplement, with universal payment for all children and top-ups for the families that need it most.

Essentially, they have ruled out taxing child benefit, arguing that it would make the plight of poorer families even worse. That would be a disaster given the parlous state of this country which is already reeling from the mass emigration of young people, chronic long-term unemployment, frightening levels of mortgage arrears, and the emergence of a new poor.

According to Ita Mangan, chairperson of the expert group, some poorer families will gain under the two-tier system whereas some better off people will suffer “major losses”. Ultimately, political decisions will dictate how that prediction pans out.

Rather than throwing the baby out with the bathwater, the report opts for the universal system of a basic payment for everyone to continue, a proposal that controversially includes the children of millionaires. Presumably, it takes on board the stark reality that even in wealthy families, many women have little access to money apart from child benefit.

What really separates the new proposal from the existing system is its two-tier suggestion of top-up payments for the families deemed to be most in need. On the face of it, however, the income threshold of €25,000 is far too low according to volunteers at the coalface of Ireland’s poverty crisis. The St Vincent de Paul charity is dealing with families on much higher income levels who are deeply mired in financial trouble.

The experts point out that their model is just one of many potential versions which the Government could use. However, the problem is that the mandarins in the Department of Finance, who ultimately decide what the level of payments and income supplements should be, will inevitably opt for whatever arrangement involves the least cost to the exchequer.

The Government will also argue that child benefit payments here are more generous than in most countries. That ignores the fact that families in other states are provided with childcare supports, free medical treatment, and other vital support systems that Ireland lacks.

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