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Dáil Éireann debate -
Thursday, 20 Oct 1994

Vol. 446 No. 2

Ceisteanna—Questions. Oral Answers. - Combat Poverty Agency Report.

Eric J. Byrne

Question:

7 Mr. E. Byrne asked the Minister for Social Welfare if his attention has been drawn to the paper entitled Family Income Support in Ireland-50 Years On, presented to the recent conference in Dublin Castle, which ranked Ireland in the bottom five of 18 countries surveyed in regard to our child benefit package; in view of this and of the report from the Combat Poverty Agency entitled The Cost of a Child, the plans, if any, he has to improve the level of child support payments; and if he will make a statement on the matter. [1626/94]

Mary Flaherty

Question:

24 Miss Flaherty asked the Minister for Social Welfare if he will make a statement on the findings of the combat poverty programme study on the cost of a child and the inadequacy of child benefit and child dependant payments. [34/94]

Helen Keogh

Question:

31 Ms Keogh asked the Minister for Social Welfare if he will consider the introduction of a new child income support scheme replacing child benefit, child additions to tax exemption limits, family income supplement and child dependence allowances paid to welfare recipients; and if he will make a statement on the matter. [35/94]

Bernard Allen

Question:

44 Mr. Allen asked the Minister for Social Welfare if he will make a statement on a survey which concludes that, in terms of child benefit packages, Ireland is consistently ranked in the bottom five in a survey carried out which compared the structure and level of financial support for children in 18 countries; and if he will make a statement on the matter. [1250/94]

Bernard Allen

Question:

46 Mr. Allen asked the Minister for Social Welfare the proposals, if any, he has in relation to the recent report by the Combat Poverty Agency showing that the current social welfare provisions for children fall short of the actual cost of rearing a child; and the proposals, if any, he has to introduce reform of child support policies. [167/94]

I propose to take Questions Nos. 7, 24, 31, 44 and 46 together.

The report entitled The Cost of a Child, published in the summer, was commissioned by the Combat Poverty Agency and was carried out by the Family Studies Centre, University College Dublin. This report states that the combined value of child support payments for families in Ireland does not adequately meet the extra costs associated with child rearing, the largest shortfall being felt in families with older children.

Significant progress has been made in recent years to improve the position of families through increases in the basic rates of payments. This has included substantial increases in child benefit together with increases in child dependent allowances, improvements to the family income supplement and the lone parent's allowance scheme.

In 1993 I increased the monthly lower rate of child benefit from £15.80 to £20, a 26.6 per cent increase and the higher rate from £22.90 to £23. One million children benefited. This year's Social Welfare Act provided for a further increase in the higher rate to £25, representing a total increase for the higher rate of over 9 per cent since early 1993 benefiting some 270,000 children. Furthermore, the higher rate from September 1994 is payable in respect of the third and subsequent children. In 1991 the higher rate was payable only in respect of the fifth and subsequent children.

Building on last year's substantial improvements to the family income supplement, income thresholds have been further increased in 1994. Eligibility thresholds increased by £10 and families are getting an extra £6 per week. Recent FIS improvements, together with the ongoing extensive publicity, have led to a significant improvement in take-up with some 9,900 families currently receiving the payment. Over 30,000 children now benefit from the FIS.

The position of working lone parents and their children has also been significantly improved. This year increased earnings disregards have been introduced. The present disregard of £6 of earnings per child has been replaced by a new earnings disregard of £24. Thereafter, for each £2 earned the allowance will be reduced by £1 instead of the £1 for £1 reduction which applied. A lone parent with one child earning £80 per week and with work-related expenses of £35 will be £28 per week better off as a result of these new measures.

Improvements in the means test for lone parents was one of the recommendations made in the interim report of the expert working group on the integration of the tax and social welfare systems which I established last year. In that report, the group also noted that the different treatment of children in the tax and social welfare codes is a factor which contributes to disincentives. The group looked at some options for a more unified system of income support for children but did not recommend any specific action at that stage. In this regard I expect that the analysis of a basic income for children contained in the recently published ESRI report commissioned by the group will be an important input. The working group will further address this matter in its final report, which will be completed in the near future.

At the official opening of last month's special conference on family income support organised by my Department as a contribution to the International Year of the Family we announced the establishment of an independently chaired committee to cost and review proposals for improvements in child benefit, such as the introduction of age-related payments to meet the costs associated with rearing older children and an extension of child benefit to age 21 where the child remains in full-time education. All the options in this area will be examined by the committee and whatever proposals are brought forward will be considered in the context of next year's budget.

Does it embarrass the Minister that we are deemed to be laggards because we fall so far behind other countries in the treatment of children in the family? Does it disturb her that Ireland's child benefit package, when compared with the packages provided by other countries for a variety of family types, tends to be ranked embarrassingly low, namely, thirteenth, fourteenth or fifteenth out of a panel of 18 countries? Is the Minister concerned about and does she intend to address the problem of the large number of children raised in poverty because of the shortfall between the State support payments and the costs involved? Does she intend to take on board any of the recommendations of the report of the Combat Poverty Agency entitled "The Cost of a Child"? That report recommended a payment of £20 per week child benefit rather than the current payment of £20 per month. Would she agree that consideration should be given to an age-related payment system as proposed by the Combat Poverty Agency? It states that the payment required in respect of children up to six years of age is £20.70 per week while an input of £37.40 per week is required in respect of children aged 13 to 18. Would she agree that our child benefit payments of £20 per month are a farce on the grounds of the much higher cost involved in rearing a child and on the basis of comparison between our child benefit package and that provided in other European countries?

As the Minister responsible for the Combat Poverty Agency I encouraged it to publish the study, The Cost of a Child. It represents an important contribution to what should be for all parties in the House an important debate as to how we should support and provide income for children. That has been one of my priorities since I entered political life.

Since coming to office as a Minister of State, I am pleased to have seen two successive increases in child benefit in both budgets presented by this partnership Government, the first increases for seven or eight years. However, I am not satisfied and am determined to work for further improvements in child benefit which is why I encouraged the agency to publish the report and to give it wide circulation on the cost of a child. In addition, the working group on the integration of tax and social welfare commissioned the ESRI to undertake a study on basic income which was published in September and which I launched. That contains a comprehensive analysis of a basic income structure for children in which the suggestion is put forward that we could have a basic income option in relation to children of up to £80 a month. The question of basic income for children is a matter that needs to be discussed and I certainly support it as an option. However, we have to find resources with which to do it and this is an appropriate matter for debate in this House. Deputy Allen, spokesperson on Finance, has at all times been concerned to cut levels of expenditure. Clearly a basic income option for children will require substantial extra resources over a period of time. That has already happened in the first two budgets of this Government and I look forward, as we achieve economic growth, to additional resources being made available to support families, particularly those with children.

As to the distinction made between the cost of younger and older children, parents did not need a serious study to know that older children cost more than younger children, that is self-evident. Everybody in this House is also aware of the costs which parents incur when their children attend a third level institution, particularly between 18 and 21 years. The Department has set up a committee chaired by Professor Fionnuala Kennedy to bring forward specific proposals in the context of the 1995 budget and I look forward to further improvements in child benefit. The first improvements for seven years took place in the last two budgets introduced by the partnership Government. I am sure we can look forward to further improvements as resources become available.

It is important to acknowledge the substantial improvements in regard to means testing of lone parents. We should let it be known far and wide that there is a greater possibility of them going to work.

The Minister's acceptance of statistics indicating how poor we are in terms of supporting children is also welcome. Their wider acceptance creates a better framework in which to formulate policy and give this area the priority it needs. In the light of the range of possible responses and in view of the outcry from Members of her own party when her views about radical reform were made known, does the Minister have a clear idea of what proposals the Government will put forward in next year's Estimates and budget? Will they include a radical overhaul of the child benefit and child dependant payments? Will it consist of an incremental response to the problem of the cost of older children?

A paper was presented at the 50th anniversary conference on child benefit in Dublin Castle, when the authors of the study acknowledged that Ireland has a higher proportion of children than other European countries. They said that if Ireland had the same proportion of children as other countries, we would be in a position to improve child benefit packages immediately by one-third. We have a great many more children than most other European countries covered in the study so our expenditure levels on children are spread over a far greater number than in other European countries. In presenting the study the authors made that point on a number of occasions.

With a view to the 1995 and subsequent budgets. I have encouraged the Combat Poverty Agency to publish and widely disseminate the cost of a child study because it is a landmark, the first study of its kind, carried out by the Family Study Centre in UCD, and to publish widely the ESRI report on basic incomes for Ireland, including basic incomes for children. I hope that will give rise to a wide-ranging debate about what income supports we as a society consider appropriate for children. Obviously the arrangements for the 1995 budget are a matter for the Cabinet. I cannot give any commitment because discussions are ongoing. However, if we as a society value families and children as much as we claim to, the progressive increases in child benefit which we have paid this year and last year, I hope, will be a continued feature of future budgets.

The Minister's actions and performance do not match her fine words. Despite the Minister's explanation that we have such a large young population we cannot afford to raise income levels for them, she must acknowledge the reality that, apart from Greece and Portugal, we have the worst record in the European Union in relation to child benefits. According to the 1992 figures the payment per child, encompassing child benefit and child dependant allowances, was an average of £16.15 per child. The Minister has had all summer to read this report. Will she now set out her ambitions and targets for the 1995 budget? What proposals will she make? What are the Minister's views on age related benefits which are a feature of systems in other countries? This matter should be debated seriously and the Minister should not indulge in cheap political jibes.

The time for questions is exhausted. I am endeavouring to have the Deputy's questions responded to.

If the Government dealt in realities rather than in myths we would have far more resources.

Every mother of children is aware of the improvements in child benefit in the last two years. In regard to Deputy Allen's point about the study, Ireland was ranked in a group which included Italy, New Zealand, which we would all agree is a relatively well off country, USA, Spain and Portugal.

I am referring to EU countries.

I will make the full paper available to Deputies who are interested in this debate.

You cannot equate US social policy with Irish social policy. There is no social policy in the US.

The Deputy also referred to the paper presented at the 50th anniversary conference on child benefit which his colleague attended.

I did not refer to it.

I am sorry. I misunderstood the reference.

I mentioned the cost of a child.

In the Programme for Government the Government is committed to effecting a systematic improvement in child benefit. I consider a debate on income supports for children to be very important for all parties. If we are to fund improvements in child benefit they have to come from some source. Rather than make a cheap political jibe, which I would never do, I wished to draw attention to the concerns of the Fine Gael spokesperson on Finance that this is a spending Government.

The Minister should not misrepresent him. He is concerned about Ministers travelling the world.

If child benefit is to be improved we will have to spend money.

There is spending in other areas that is not necessary.

We need a debate on two elements: how much we need to spend in terms of child support packages and the way in which those packages are financed in the context of total Government spending. I apologise if Deputies consider that a cheap jibe but I believe it is a contribution to the debate.

The Minister did not answer my question on wage related benefits.

I answered it earlier.

I am astounded the Minister——

If the Deputy has a brief question I will hear it. Question Time has expired.

I am trying to make my point. I am astounded the Minister feels obliged to kick to touch to an independent committee chaired by Dr. Fionnuala Kennedy. Would the Minister agree that the facts and figures are clear and we do not need a committee? On a chart of 18 countries we rank among the bottom two or three. Does the Minister agree, given that we are making international comparisons, that since in the European Union there is a Common Agricultural Policy, Common Defence Policy and common markets, it is time there was a common policy on child benefits in order to bring us from the bottom rung of the ladder to the middle, with a view to getting to the top?

The partnership Government is committed to effecting systematic improvements in child benefit. I am particularly pleased to be associated with the improvements this year and last year. The ESRI study and the Cost of a Child study will lead to a serious debate on how we should resource child income support and how much should be allocated for that purpose, taking into account the question of age differentiated benefits for which there is a very strong case. All parents know that older children cost more; we do not need a study to tell us that.

On the development of European policy, I am a firm believer in the idea of a social Europe. In the context of the Maastricht Treaty I would welcome convergence of child benefit supports at the higher level throughout the European Union. However, that is a matter for another day. Convergence of social policies within the European Union, particularly to the higher levels that obtain in some countries, would be welcome. As the authors of the paper at the Dublin Castle conference pointed out, Ireland has a unique demographic structure in having more children than any other European country, which is a great advantage to us. It also means we spend more money on child benefit. I am committed to systematic improvements in child benefit during the life of the partnership Government.

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