Belfast Telegraph

Monday 24 November 2014

Child benefit reform plan defended

The proposed child benefit reform opted for two payment types rather than taxing wealthier families
The proposed child benefit reform opted for two payment types rather than taxing wealthier families

A reformed child benefit regime which targets middle and higher income families is the lesser of two evils, the architect of the scheme has said.

Ita Mangan, chair of the expert group which advised the Government to bring in two-tier payments, said it was inevitable that some average families would lose out in a "cost-neutral structure".

"The biggest losers from the proposal we have made would be middle and higher income earners, because they would not get any part of the second tier payment," Ms Mangan said.

The proposed child benefit reform opted for two payment types rather than taxing wealthier families.

Ms Mangan said that some families in lower income groups also stood to see a drop in their benefits depending on whether they receive the state's family income supplement (Fis) - a payment made to those in work who earn below a certain amount.

The group recommended a two-tier system aimed at capping payments for the better off.

This would entail a universal child benefit for all, with automatic top-ups to those on social welfare or for families with incomes below 25,000 euro.

Every family would get 110 euro a month per child - down 20 euro on current rates - with top-ups for poorer families as high as 38 euro a week.

The second tier would taper according to how much a family earns over the 25,000 euro threshold.

Ms Mangan told an Oireachtas committee on education and social protection that opting for a two-tier system over taxing child benefit would ultimately benefit more people. She said that taxation would create too many problems, such as legal issues regarding differences between parents who are married and those who co-habit.

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