Dáil Éireann - Volume 490 - 29 April, 1998

Written Answers. - Child Support.

21. Proinsias De Rossa asked the Minister for Social, Community and Family Affairs if his attention has been drawn to the findings of the most recent report of the European Observatory on National Family Policies that, despite recent improvements, Ireland's child benefit package was still below the European mean; if, in view of these findings, he will agree to substantial increases in child benefit in the next budget; and if he will make a statement on the matter. [10044/98]

Minister for Social, Community and Family Affairs (Mr. D. Ahern): The report of the European Observatory on National Family Policies referred to by the Deputy was published in October 1997 and refers to the situation in 1996. The report examines the contribution of public policy, including taxation and social welfare measures, to the cost of a child in the cases of couples or lone parents in employment. The report does not, therefore, take into account the arrangements in social insurance or social assistance schemes to support, for instance, dependent children of people who are unemployed.

While acknowledging that accurate intra-country comparisons are difficult to achieve in view of the variation in the types of child income support provided in different countries, the report nonetheless concludes that Ireland was amongst a group of countries with relatively low levels of provision. It does acknowledge the substantial improvements achieved in recent years, particularly for low income families.

Child income support policy in recent years has sought to ensure that the supports provided by the State are more neutral vis a vis the employment status of the parents. There is widespread agreement that child benefit is one of the more effective mechanisms for the provision of child income support. It is effective in tackling poverty as it channels resources directly to families most in need and is of particular importance to families on low incomes. As it is not taxable, and is not withdrawn when an unemployed parent takes up employment or assessed as means for other secondary benefits such as differential rents, medical [572] cards, etc., it does not act as a disincentive to taking up employment or improving wages.

The increases provided for in the 1998 budget are targeted especially at the larger families, who are at greatest risk of poverty. With effect from September 1998, the rates of child benefit are being increased by £1.50 for the first two children and by £3 for the third and subsequent children. This will bring the lower rate up to £31.50 and the higher rate up to £42. A family with four children, for example, will now receive monthly payments of £147 or almost £34 per week. Provision is also being made this year for the introduction of a new payment of 150 per cent of the normal child benefit rate for twins.

The family income supplement scheme is being enhanced as a means of increasing the net return from work to families with children. Accordingly, from October this year and in line with a commitment made in the Partnership 2000 agreement, FIS will be reformed to be calculated on a net income basis, rather than on gross wages, as at present. This will significantly increase the supplements payable under the scheme, thereby increasing the rewards from work. The full year cost of the 1998 budget changes in FIS and child benefit is over £38 million; this compares to just under £33 million in 1997.

The further enhancement of the child benefit scheme is a matter for consideration in the context of next year's budget. I am confident, however, that in conjunction with the measures I have just outlined, the continued future development of child income support will have the effect of improving the value of the child benefit package provided here.