I propose to take Questions Nos. 16, 25 and 41 together.
The reduction and eventual elimination of child poverty are at the core of the strategies to combat poverty and social exclusion, a priority shared internationally. The OECD, in a report to Ministers for Social Affairs in April 2005, pointed out that "children who grow up in disadvantaged households are more likely to do poorly at school, to struggle to find a job, and to be unemployed, sick or disabled when they become adults, precipitating an inter-generational cycle of disadvantage and deprivation.".
Detailed measures to give effect to the strategies to combat child poverty in Ireland are set out in the national action plan against poverty and social exclusion and in the national children's strategy. Ending Child Poverty is also one of ten special initiatives in Sustaining Progress. The latest available child poverty data is from the EU survey of income and living conditions, EU SILC, for 2003. The EU SILC indicated that 23.9% of children, equivalent to approximately 200,000, are "at risk of poverty", that is, living in households with less than 60% of median equivalised income for their household size. Of these, 120,000 approximately or 14.6% of children are living in households with income below the 60% threshold and experiencing deprivation in at least one of eight indicators considered essential for a decent standard of living in Ireland today.
The relatively high percentage rates of poverty are, paradoxically, in part due to the major increases in household incomes generally that have occurred due to our unprecedented economic growth and the resulting major expansion in employment. A recent EUROSTAT study, for example, calculated the monetary value of the 60% threshold in terms of purchasing power standards in 2003 for households with two adults and two children. This showed that the threshold in Ireland is now above the EU average in value and ranked eighth highest overall among the EU 25. This means that many households in Ireland with incomes below the 60% threshold, including those with children, may have a better standard of living than similar households classified as not at risk of poverty in other member states.
I mention this because a misleading impression is often given that the level of poverty in Ireland is among the highest even in the enlarged EU. This comes as a surprise to many, given the improvements that have been made with employment, increases in social welfare payments and in education, health, housing and other essential services. The real challenge, therefore, now is no longer in combating absolute poverty but in addressing the reality that many households, especially those with children, have not managed to secure an adequate share of the growing employment opportunities on offer and in the higher standards of living these provide.
The Combat Poverty Agency policy statement on ending child poverty, which I recently launched, deals with this reality. The statement identifies three specific areas for attention. These are the need for increased and targeted child income supports; measures to encourage lone parents back to education, training and work, and the delivery of additional child care places. These are fully in line in this regard with my priorities and those of the Government.
The most significant measure to support families with children in recent years has been the substantial real increases in child benefit payment rates. Between 1997 and 2005, the rate of child benefit rose from €38.09 per month for the first two children and €49.52 for each child thereafter to €141.60 per month for each of the first two children and to €177.30 per month for the third and each subsequent child. This equates to real increases in excess of 170%. Child benefit is paid to over 540,000 families in respect of approximately 1 million children, at an estimated cost of €1.916 billion in 2005. It delivers a standard rate of payment in respect of all children in a family regardless of income levels or employment status. Providing income support in this way thus creates no obstacles to employment and facilitates employment take up by providing significant support with child care costs.
Through the family income supplement scheme, my Department provides cash support by way of weekly payments to families at work on low pay. Recent improvements to the scheme, including the assessment of entitlements on the basis of net rather than gross income and progressive increases in the income limits, have made it easier for more lower income households to qualify under the scheme.
There is now full-time or part-time employment take up in a significant proportion of households with children. These mainly include recipients of the one-parent family payment or of payments in respect of disability and unemployment. In other households with bigger families, only one parent may be able to take up employment, which results in a lower family income. I believe that part of the solution to this may be the introduction of an integrated, second tier of child income support, aimed specifically at families on low income. This would supplement the support provided by child benefit in terms of creating no obstacles to employment and contributing towards the cost of child care in facilitating employment. It would also help to facilitate the option of part-time or full-time parental care for children.
In developing these policies full account will be taken of the Combat Poverty Agency study and of a forthcoming study under the Ending Child Poverty special initiative by the NESC on amalgamating social welfare child dependant allowances with the family income supplement. The present system of weekly payments and other supports for lone parents may be creating obstacles to employment and thus contributing to growing dependence on these payments and a greater long-term risk of poverty for recipients and their children. This level of dependence does not appear to occur in many other EU countries. I, therefore, fully accept the priority which the Combat Poverty Agency study gives to encouraging people on benefit, including lone parents, back to work. This has already been under active consideration for some time.
A sub-group of the senior officials group on social inclusion has been undertaking since last year a detailed examination of obstacles to employment for lone parents. A report will be submitted to the Cabinet committee on social inclusion before the end of July, consideration of which will receive top priority.
The provision of affordable and flexible child care is also a key factor in facilitating employment participation for families with children. My Department is participating in an interdepartmental working group on early child care and education, chaired by the National Children's Office. The work of this committee is at an advanced stage and the outcome will make an important contribution to finding the right mix of services and income support to facilitate employment take up and care for children.
We need to monitor and evaluate the outcomes of the policies being pursued on the development of our children and get the necessary evidence on what works and works well. This process is about to commence with a major national longitudinal study on children which is expected to commence later in 2005. It is being jointly funded by my Department and the Department of Health and Children, through the National Children's Office. The study will be the most significant of its kind to be undertaken here, particularly in terms of the cost, scope and length of study period. It is anticipated that 10,000 children from birth and 8,000 children aged nine will be recruited to participate in the study.
I am confident that through the measures already being taken and the initiatives being planned, which will soon come to fruition, we are making a major contribution to ensuring that vulnerable families and their children have a fair share of the life chances and quality of life, which our prosperity as a nation is already conferring on a majority.