This section provides for the improvements in child benefit. Subsection (1) provides for an increase of £7 in the monthly rate of child benefit. The new rates will be £27 for each of the first two children and £32 for each subsequent child.
Under existing provisions, child benefit is paid up to 18 years of age in the case of qualifying children who are in full-time education or who are physically or mentally disabled. Subsection (2) extends these provisions to 18-year olds who are in full time education or who are physically or mentally disabled.
Under existing provisions, child benefit can be paid outside of the State to a parent who is resident abroad while serving as a member of the Defence Forces or the Civil Service. Subsection (3) enables child benefit to be paid to a person who is resident abroad with his or her spouse or partner, where the spouse or partner is serving abroad as a member of the Defence Forces or Civil Service. Subsection (4) provides for the increased rate of child benefit and the extension to 18-year olds to come into effect on 1 September 1995.
The £7 increase will cost £90 million in a full year and the extension to 18-year olds in full-time education will cost an additional £12.8 million, a total of £103 million in a full year for the increase in child benefit. The increase from £20 to £27 will benefit in the region of 1,073,000 children and 490,000 families. The increase from £25 to £32 will benefit an additional 259,000 children and an additional 161,000 families.
The extension to 18-year olds in full-time education will benefit 20,800 children in second level education and 16,700 young people in third level education, a total of 37,500. Overall, a total of 1,369,500 children will benefit from these improvements. In addition to these improvements, payment of child benefit is being extended to 18-year olds on FÁS courses who are not receiving a weekly allowance; 1,900 young people will benefit from that measure.
This is an example of the targeted strategy that I referred to earlier, in response to criticisms of this social welfare budget from the Fianna Fáil representatives of this committee. It is an unprecedented increase in child benefit; never before has an increase of this size been granted. It is one of the best ways of targeting poverty in Ireland because those at most risk tend to be the families with most children. In the vast majority of cases, child benefit is paid to women. In many cases, it is a mother's only source of independent income. Studies have shown that women generally spend more of their income on their families than men, so directing payments to women is more likely to benefit children. We are mainly referring here to children who are in middle and low income households. Only 7 per cent of child benefit goes to people with incomes of over £25,000 per annum.
Since child benefit is a universal payment which is not taxed or withdrawn if parents take up employment, it does not act as a poverty or unemployment trap or a disincentive to work and this is a further reason for channelling as much income support for families as possible through this payment. It is one of the reasons why the Government intends to build further on this year's major increase and restructuring of the child income support system next year.
Women and children on low incomes are, of course, major beneficiaries generally of this social welfare budget and this appears to have gone largely unnoticed by the Fianna Fáil members of this committee. Of the extra £212 million which is now available to the Department of Social Welfare and which is being provided for in this Bill, £103 million is to be spent on improving child benefit, another £1.4 million on increasing the back-to-school clothing and footwear allowance under the SWA scheme and a further £4.2 million on carer's allowance, maternity benefit and pension arrangements for home makers, who are also mainly women.
Another £20 million has been earmarked for improvements in the deserted wives' and lone parents' allowances. The intention there is to bring in a separate Bill to cover these allowances. We would be introducing a uniform scheme for all parents who, for whatever reason, are rearing children on their own and need support. The scheme will be non-discriminatory, will cover both men and women and will be non-judgmental. Payment will depend not on the reasons for sole parenthood but simply on the number of children and the earnings of the parent concerned. No one will lose out as a result of the change.
The £127 million, or 60 per cent, of the increase in social welfare spending for the coming year is almost entirely going to women and children. We have also set aside a further £60 million to pay the equal treatment arrears. Indeed, I have negotiated a further £140 million since the announcement of the budget and this brings the total payments to married women who are entitled to equality arrears to £200 million this year.
This demonstrates that the criticisms of this budget are shortsighted and illfounded. The directing of substantial resources in a focused way to tackle the fundamental poverty in families is the best way to proceed. I acknowledge, as I have done on previous occasions in this debate and in earlier debates on the budget, that of course the basis rates should, and will be, increased. However, it is necessary to allocate resources, as they become available, in a way which tackles poverty in a real and not a superficial way. Any objective and fairminded assessment of this Bill would conclude that the fairly massive resources we are allocating to child benefit under section 5 of this Bill is the way to go.