In 2013, the estimated expenditure on child benefit will be approximately €1.9 billion to around 609,000 families in respect of some 1.16 million children. Child benefit is a monthly payment made on a universal basis to families with children in respect of all qualified children up to the age of 16 years. The payment continues to be paid in respect of children up to their 18th birthday who are in full-time education, or who have a physical or other disability.
Budget 2012 maintained the child benefit rate for the first and second child at €140 per month. The monthly rate for the third child was reduced to €148 and for the fourth and each subsequent child to €160. Budget 2012 also provided for the discontinuation of the grant for multiple births but we have continued the premium payments of 1.5 times the standard rate for twins and twice the standard rate for other multiples. Budget 2013 made further reduction in child benefit rates to €130 for the first, second and third child while the rate for the fourth child and subsequent children was set at €140. Budget 2013 also provides for child benefit rates to be standardised at €130 for all children from January 2014.
It should be noted that despite recent reductions in the child benefit rates, the current rate compares favourably with rates in, for example, 2002 when the lowest rate was €117.60 or 2005 when the lowest rate was €141.60.
Notwithstanding these changes, our expenditure and payments on child benefit remain among the highest in Europe. Since becoming Minister for Social Protection, I have strongly defended the universality of child benefit because the State must value every child and support families. Also, the fact that every family, regardless of their employment status, receives child benefit ensures that in the current system there is not a disincentive to work.
Additional information not given on the floor of the House
Unfortunately, it has not been possible, given the level of adjustments required, to exempt income support to families from the general budgetary strategy. Although these measures are primarily designed to reduce overall public expenditure with a view to restoring stability to the public finances, some of the savings have been redirected towards services targeted at low-income families. The Children Plus Initiative
provides for an increase of €2 million for school meals, €14 million for after-school child care and €2.5 million for an area-based child poverty initiative. The reasons for child poverty are multifaceted. Factors contributing to child poverty include living in lone parent households, labour market inactivity of parents, low parental educational attainment and living in households dependent on income supports. Therefore, a multidimensional approach is required to address this issue, including not only child income supports but child related services.
On reductions in child poverty, the redistributive effect of social transfers, including child and family benefits, can be observed in the at-risk-of-poverty rate for children set out in the Central Statistics Office survey on income and living conditions reports. Although it is not possible to isolate the poverty reduction effect of child benefit only - it is included with all other social transfers - the impact of social transfers in reducing child poverty is quite substantial.
During the period 2004 to 2010, which is the period for which the most recent data on children are available, the poverty reduction effect of social transfers rose continuously from 43% to 62%. The most recent CSO data show that in 2011 social transfers reduced the overall at-risk-of-poverty rate for the total population by 60%. Despite economic difficulties, of which people are aware, we have maintained payment to families at a very high level. An estimated €1.9 billion will be paid to around 609,000 families in respect of some 1.16 million children in 2013.