asked the Minister for Social Welfare if he is considering the possibility of treating child benefit as taxable income; or if he proposes to subject child benefit to a means test.
45.
Ceisteanna—Questions. Oral Answers. - Child Benefit.
6.
asked the Minister for Social Welfare if he is considering any change in relation to the payment of child benefit; if he is considering any proposals to restrict the payment of child benefit to certain income categories; the plans, if any, he has for the taxation of child benefit; and if he will make a statement on on the matter.
50.
asked the Minister for Social Welfare if an inter-departmental committee has examined or is examining ways and means of taxing child benefit; if so, when the committee is expected to report; and if he will make a statement on the matter.
52.
asked the Minister for Social Welfare the changes, if any, he is considering in the eligibility for child benefit; and if he will make a statement on the matter.
I propose to take Questions Nos. 6, 45, 50, and 52 together.
The Estimates for 1988 which were published recently provide for the continued payment of child benefit on the same basis as heretofore.
The possibility of introducing a degree of selectivity into the child benefit or children's allowances scheme, has been considered over a number of years. The previous Government had decided to introduce selectivity by making child benefit taxable. However, the administrative difficulties which arose in trying to match the child benefit and income tax records were such that the proposal was abandoned.
An alternative way of achieving selectivity would be to have an income limit for payment of child benefit. The application of an income limit would also pose major administrative difficulties depending on the income data which are used to determine entitlement.
In a situation of limited resources there are strong arguments in favour of applying a degree of selectivity in the child benefit scheme, whether through taxation or through an upper income limit. The administrative feasibility of achieving such selectivity is being examined by officials of the Departments concerned and the question will be discussed by the Government when that examination has been completed.
Does the Minister expect the present inter-departmental consideration to be completed shortly? Can we expect any changes in child benefit in 1988?
I am sure the Deputy will appreciate that I cannot anticipate what the Government might do in the future. The investigations have been ongoing for some time. The Deputy will probably be aware that there are considerable administrative difficulties involved in matching the data from different sources. At this stage I could not say how long this will take or whether it will be a success, but the Departments concerned are pursuing the matter in a fairly urgent way.
Can I ask the Minister, who has a preference for selectivity, to illustrate in any of the policies he has pursued to date where that selectivity has been applied? As far as I can see he has been totally unselective in everything he has done, including the Christmas bonus. What was the basis of his reply to me on 11 November when he said that the saving by discontinuing child benefit payment to those with an income of over £20,000 would be £26 million?
I presume the Deputy at that stage had asked a statistical question on the implications of an upper income limit, if such were imposed. An upper income limit of £20,000 for child benefit would effect a saving of £26 million in a full year. The effect of taxing the child benefit would be of the order of £54 million. For example a £25,000 upper income limit would result in savings to the Exchequer of £12 million. These are purely theoretical calculations at this stage on what the position might be if such a decision were taken in future.
What is the statistical base for the figures which the Minister has just given? If he has that statistical base why can he not be more selective in paying child benefit, giving more to the poor and less to the well off?
The information is based on estimates by the Revenue Commissioners of the people who would come into the different income limits. Problems arise when one goes to match such information, as the Deputy is probably well aware, with the information in social welfare. In the Department of Social welfare child benefit is paid for each child and we, therefore, have complete information on the numbers of children and their details. The Revenue Commissioners' information is separate from social welfare and is collected for different purposes. If one were to impose an upper income limit, one would obviously have to be able to match the two sets of data. That difficulty arose when the previous Government were examining that question and is currently a problem.
Will the Minister guarantee, regardless of proposed selectivity measures, that the direct payment of child benefit, or children's allowance to the mother, usually the spouse in the home, will continue, because this is the only direct payment to her and acknowledgement of her contribution? Payment of child benefit cannot be recorded or decided on the basis of an income limit because a wife in the home is economically dependent and therefore, her husband's income need not necessarily reflect the fact that she is getting an adequate allowance for herself and her children.
I fully appreciate the value of the child benefit to the spouse in the home, the woman in normal circumstances. I also appreciate the difficulties that may arise in attributing income to that spouse. That is one of the questions which would have to be considered if sufficient data were available to even begin to consider that question.
Would the Minister not accept that it is a scandal that we are paying £12 million in child benefit to people with incomes of over £25,000 a year when we are causing so much depredation elsewhere in the public service?
It is my function to pay child benefit to those who are legitimately entitled to it.
Earlier in the year the Minister dropped the special allowances of £35 a week to those living alone. What sort of selectivity is that?