Vol. 501 No. 5
1 Mr. J. O'Keeffe asked the Minister for Social, Community and Family Affairs his views on the Combat Poverty Agency's figures on the extent of child poverty; and his further views on whether substantial improvements in child benefit is the best policy response to the problem. [6481/99]
The Combat Poverty figures to which the Deputy refers relate to figures published by the statistical office of the EU, EUROSTAT, in May 1997. The figures, based on data drawn from the European Community household panel, found that in 1993, 28 per cent of children in Ireland lived in households whose income was below 50 per cent of average net household income.
The incidence of child poverty is a major concern of this Government and successive budget measures, along with targeted policy initiatives, have sought to ensure that our children are protected and given the opportunities to break an intergenerational cycle of poverty.
One of the means by which child poverty can be tackled effectively is child benefit. The link between the risk of poverty and family size has been firmly established and my Department's provision of income support in respect of children plays a crucial role in combating the incidence of child poverty. Child benefit channels resources directly to families and is of particular importance to families on low incomes. As it is universal, not taxable and not assessed as means for other secondary benefits such as differential rents, medical cards etc., it does not act as a disincentive to taking up employment or improving wages. It is further complemented by programmes in other Departments aimed at combating disadvantage among children, for example, the Department of Education and Science's Early Start and Breaking the Cycle initiatives and the Children at Risk initiative in the Department of Health and Children.
A key factor in combating the incidence of poverty, and child poverty in particular, relates to the adequacy of the payments made under the various schemes. Increases in last December's budget mean that all social welfare payments have now reached or in many cases have exceeded the minimum level recommended by the Commission on Social Welfare. In addition, increases to the monthly rates of child benefit in recent budgets have established its growing importance within the overall child income support system with a particular focus on the needs of larger families.
The recent budget provided for child benefit increases of £3 per month to £34.50 for each of the first two children and £4 per month to £46 for the third and all subsequent children. Some 513,000 families with a total of 1.2 million children will benefit from these increases. The full year cost of these increases in last December's budget is £40.76 million and the total projected spend on child benefit in 1999 is £447.5 million compared to a total spend of £231.3 million in 1993, the year the EUROSTAT study was conducted. In addition, the 1999 budget provided for an increase in the family income supplement threshold of £8 per week which, allied to last year's introduction of FIS calculated on a net income basis, means that thousands of families are better off as a result.
Critical decisions will continue to be required in setting a policy course for the future development of child income support. The application of substantial resources in recent years towards the provision of increases in child benefit represents a tangible move towards removing disincentive effects and encouraging a move into employment which is a key step in addressing overall poverty. The reform of FIS represents another equally important step.
In summary, I assure the Deputy of this Government's continued support for increases in family support payments generally and our overall commitment to a families first policy and to services benefiting children, particularly those in poverty.
I remind Deputies that, under rules for priority questions, if we do not reach Question No. 3 by 2.50 p.m. it cannot be taken and falls.
I will briefly raise one aspect of this matter and I ask the Minister briefly to reply. Do we have child poverty as alleged? Does the Minister accept EUROSTAT's figures, even if they are based on a survey which is a few years out of date? Does he accept that the Combat Poverty Agency report claimed that one in three of all children in Ireland lives in poverty? Does he accept that the report also says we have the second highest rate of child poverty in the European Union? Does he also accept that the Combat Poverty Agency report says that child poverty is increasing? With regard to establishing the extent of the problem, does the Minister accept that it is shocking that a country with such a buoyant economy has such a high rate of child poverty?
I am not about to say there is not any child poverty in Ireland. There is. I emphasise that the Combat Poverty Agency based its analysis on figures from 1993 which show that 28 per cent of children – not one third as the Combat Poverty Agency said – live in households believed to be below the poverty threshold. What has happened since 1993? There has been a huge change of emphasis, particularly in child benefit. Approximately £1 billion goes on child benefit. In 1993 less than £250 million was spent on it. On coming into office, the Government established a Cabinet sub-committee on social inclusion and much of the concentration of that sub-committee has been on child poverty. I can immediately think of a number of initiatives of that sub-committee. For example, in my area, I have established a new foundation for investing in communities which has a particular focus on building up a children's trust. My colleague, the Minister of State at the Department of Health and Children, Deputy Fahey, will be bringing forward a children's trust in the near future to deal with disadvantaged children. I can assure the Deputy that the Government is concentrating on the issue of child poverty and will continue to put substantial resources into this area.
Now that we have established the extent of child poverty – and I do not propose to argue about whether the figure is 28 per cent of 33 per cent – what is the Government doing about the problem? Does the Minister accept that it is generally accepted by experts and non-experts alike that the most effective mechanism of child support is child benefit? On that basis, does the Minister agree that the 1999 provision which amounts to 28 pence per week – because the £3 per month increase does not come into effect until September – is not a useful contribution to solving the problem of child poverty? Does he accept the need for a radically new approach to child benefit? Does he accept that the Fine Gael proposal to increase child benefit to £20 per week, particularly for children aged five and under, is now quite feasible given the Exchequer funds that are available? Such an increase might not have been feasible in the past but it is now. The money is there. Does the Minister accept the need to substantially increase child benefit, particularly for smaller children?
The Government and I fully accept what previous Governments have done in substantially increasing child benefit. This benefit is universal, it is not taken into account in making assessments of means and it is not taxed. For these reasons it gets to the core of the problem particularly for low income families who most need it. However, because the benefit is universal it is extremely costly. To increase child benefit by 50 pence costs £5 million. I accept that it is the best method of progressing the question of child poverty, particularly in low income families.
Deputy O'Keeffe referred to Fine Gael's recent proposal, but that is not strictly a Fine Gael proposal as it has been mooted for some time.
It is a Labour Party policy.
Does the Minister agree with it?
All parties are claiming credit for it now. The report of the Commission on the Family proposed various allowances for children under the age of three and between the ages of three and five, which is akin to Deputy Bruton's recent suggestion. I firmly believe assistance should be given to families with children in that age group, but I question this proposal. This issue is being carefully examined by an interdepartmental committee in relation to the issue of child care. A family with, for example, three children aged three, four and five who have come to rely on an income under this scheme, will be bereft of that income when those children reach the age five. A family in receipt of £150 under this scheme might have their benefit cut to £100 in one fell swoop. I am not sure if that has been taken into account in this proposal, for which the Deputy on my left claimed credit.
We would all claim credit for it if we could implement it.
A programme for Government drawn up by the two parties opposite proposed a basic income for children by systematic improvements in child benefit.
The Government did not continue that policy.
Child benefit was increased by 60 per cent.
We allocated an extra £40 million in respect of child benefit in December 1998 compared with an allocation of £25 million by that former Government in its last year in office.
Child benefit was increased by 60 per cent and the Minister knows that.
