Dáil Éireann Debate, Thursday - 21 February 2013
137. Deputy Michael Healy-Rae asked the Minister for Social Protection the way she proposes to protect middle income families, who will be hardest hit, if the Government goes ahead with the taxing of child benefit as outlined in the Mangan Report; and if she will make a statement on the matter. [9403/13]
View answerCreating jobs and tackling poverty are two of the key challenges that Ireland now faces and it is essential that our tax and social protection systems play their part in addressing these issues. In 2013, my Department will spend over €2.8 billion on supports to families and children and we need to be sure that this major investment delivers good outcomes. To this end, and in line with commitments contained in the Programme for Government, I established in 2011 the Advisory Group on Tax and Social Welfare, with the aim of harnessing expert opinion and experience to examine a number of specific issues and make cost effective proposals for improving employment incentives and achieving better poverty outcomes, particularly child poverty outcomes.
I was pleased to publish the first report of the Advisory Group examining child and family income supports on 20 February. This report makes important recommendations on how child benefit could be maintained as a universal payment while reforming the current system of child and family income supports so as to better target those who need these supports most. The report records that while some members of the advisory group found that taxation of child benefit is an attractive reform option, it was recognised that this approach, being limited to only one child and family income support payment, does not contribute to a better overall design of the child and family income support system. For this and other reasons, there was a strong preference in the group for another approach based on a two-tier child and family income support payment approach. The group considered that this would allow for a rationalisation of the overall child income support system while minimising work disincentives and allow for better flexibility in the targeting of support for different household types.
Given a range of complex issues involved, including fiscal, operational and legal considerations, as well as the implications for reforms in terms of child poverty and employment incentive outcomes, the Government has made no decision at this time on the core recommendations of the report. Issues relating to changes in taxation policy are a matter for my colleague, Michael Noonan T.D., Minister for Finance.
It is the Government’s intention that the report will now contribute to the policy debate on proposals to reform the structure of child and family income support payments, including the balance between income supports and services, such as childcare, while taking into account further work by the advisory group on social protection and taxation supports for working age persons as well as more general developments in the budgetary and fiscal situation.
