Dáil Éireann Debate, Wednesday - 10 November 2004
137 Mr. Gogarty asked the Minister for Social and Family Affairs if he will provide the rates of child dependant allowance that would now exist had CDA payments been indexed linked and not frozen at 1994 levels. [28170/04]
Amharc ar fhreagraSince 1994, successive Governments have held the rate of child dependant allowances constant while concentrating resources for child income support on the child benefit scheme. It is important to recognise that over that period, the combined child benefit-child dependant allowance payment has increased by more than double the rate of inflation.
Child benefit is neutral vis-à-vis the employment status of the child’s parents and does not contribute to poverty traps, whereas the loss of child dependent allowances by social welfare recipients on taking up employment can act as a disincentive to availing of work opportunities. As a universal payment, which is not taxable and is not assessed as means for other secondary benefits, child benefit is in fact more effective than child dependant allowances as a child income support mechanism when account is taken of these incentive issues.
The Government's commitment to this policy is reflected in the substantial resources invested in the child benefit scheme since entering office, including an additional expenditure of €1.27 billion on child benefit when the current programme of multi-annual increases is complete. We will then have moved from a position in 1994 where 70% of child income support for a family claiming social welfare payments was in the form of child dependant allowances, to a position where child dependant allowances will account for less than 33%.
The issue of the appropriate strategy to succeed the current one of increasing child benefit rates has been brought to the fore by the special initiative in Sustaining Progress, and in particular the commitment to review the importance of child income support arrangements, including examining the effectiveness of, for example, merging child dependant allowance with family income supplement, FIS. NESC has been commissioned to carry out this review.
It is estimated that if the three rates of child dependant allowance, €16.80, €19.30 and €21.60, were index linked from 1994 to 2004 they would be €22.66, €26.04 and €29.14 respectively.
The issue of increasing child dependant allowances has been raised on a number of occasions. The increased investment in the child benefit scheme which the Government has made in recent years has been of major benefit to families and is a most effective use of the resources available for child income support. The question of further rationalisation of child dependant increases will be a matter for consideration in a budgetary context and in the context of priorities generally.
