Dáil Éireann Debate, Tuesday - 5 March 2013
80. Deputy Willie O'Dea asked the Minister for Social Protection her views on the recommendations of the advisory group report on tax and social welfare chaired by Ita Mangan; and if she will make a statement on the matter. [11426/13]
Amharc ar fhreagraIn 2013, my Department will spend over €2.8 billion on supports to families and children, of which €1.9 billion will be on child benefit, €220 million on FIS, €694 million on qualified child increases and €49 million on the back to school clothing and footwear allowance. This amounts to a very significant part of the Department of Social Protection budget, around 14% of total.
We need to be sure that this major investment delivers good outcomes. In line with commitments contained in the programme for Government, I established the advisory group on tax and social welfare in 2011. The advisory group brought together people with experience and expertise on the issue of how best the State should support families with children, on social welfare payments and on low pay.
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 high level recommendations on how child benefit could be maintained as a universal payment, and I welcome this recommendation.
The group concluded that there is no one perfect method of targeting child and family income supports. There was a strong preference in the group for an approach based on a two-tier child and family income support payment. The group considered that this approach would allow for a rationalisation of the overall child income support system. The two-tier child income support payment would encourage work participation and allow for better flexibility in the targeting of support for different family types.
I must interrupt the Minister there. The rest of the reply will appear in the Official Report.
I just want to add that some members of the group found that taxation of child benefit is an attractive reform option but it was recognised that there are difficulties in this regard. As it is focused only on child benefit, it would not contribute to a better overall design of the family and child income support system.
Additional information not given on the floor of the House
According to the group's report, the main legal issue relates to the requirement that cohabiting couples with children would not be treated more favourably than married couples with children. This could arise, for example, if the child benefit income was deemed to be the income of the income-earning spouse but could not be deemed to be the income of the income-earning co-habitee. The group also noted that questions had been raised in relation to ownership of the child benefit payment and therefore who would be assessed for tax purposes.
Given the 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.
I have asked for, and I welcome, as wide a debate as possible on these important issues. In considering the proposals to reform the structure of child and family income support payments, including the balance between income supports and services, such as child care, I expect that Government will also take into account further work by the advisory group on the issue of social protection and taxation supports for working age persons and more general developments in the budgetary and fiscal situation. Last week there was a good debate in the Seanad and the advisory group's report will be considered by the Joint Oireachtas Committee on Social Protection on 20 March. I look forward to hearing the views of Oireachtas Members and other stakeholders as part of the broader public debate.
Already out of this year's budget, I allocated €14 million in 2013 for a joint initiative between the Department of Social Protection and the Department of Children and Youth Affairs to provide over 6,000 additional after school care places.
I thank the Minister for her response. In the course of her response - there is limited time here - the Minister stated how much the Department will spend on child income support, that the report has been published, and that a minority of the advisory group favours taxation and a majority favours a two-tier system. I know all that. I asked the Minister had she herself any views on the recommendations in the report, in other words, whether she is for or against it, and whether she is prepared to recommend it as the way forward albeit with some modifications.
The Minister will recall that she expressed concern here on a number of occasions about an apparent reluctance on our part to look at the question of targeting benefits payable under the social welfare scheme. This report provides for a method of targeting. Does the Minister support that?
I received the report roughly a year ago. On receiving the report, I had the poverty impact of the different recommendations in it examined in some detail. I refer to changes in big systems such as social welfare. With over 600,000 families getting child benefit for nearly 1.2 million children, there was a need to look at what the changes in operations would require and how long would they take, and the advice to me was that it would take at least 18 months.
Fianna Fáil, in the programme for national plan put forward before it left Government, spoke of rebalancing and integrating child income support and having a universal component as well as a supplementary payment. I am sure Deputy O'Dea is familiar with his own party's work in Government on the issue.
The group is doing work on the interaction of tax and social welfare in families with children which includes looking at the family income supplement payment. I understand that report is due some time later this year. Taking the suite of recommendations together, I will look and see how we can better target.
The Deputy will be aware that in this year's budget I got the agreement of Government to start a pilot project for 6,500 after school child care places - the first such development - and to fund from my Department, but working through the Department of Children and Youth Affairs, an area-based approach to child poverty. In fact, we have already begun a significant programme of targeting.
As I have stated previously, I would like to see significantly more targeting. Some 22% of families are jobless households.
Children in those jobless households have a higher risk of being at poverty than anybody else so it is important to have a detailed national discussion on all the different elements of this issue.
I am familiar with the NESC report which we commissioned when in government with recommendations along somewhat similar lines. In talking about examining FIS, the Minister will be aware that FIS is part of the package, which concerns FIS, qualified child increases and child benefit. While I accept what the Minister said about early child care, in regard to the poorer section of the community the provision she has made for that represents approximately 10% of what she has taken back through cuts to child benefit, which proportionately affect the poorest most.
I take the point that this will take 18 months - possibly over two or even three budgets - to implement. If the Government wants to go in this direction, it should be planning now to start the implementation process in the next budget. I note that when the report was initially published the Minister said it would be referred to the Oireachtas Joint Committee on Education and Social Protection to discuss it following which it may or may not come back to the Dáil. If the Government is to start providing for this in the next budget, surely there needs to be some timetable for it. Where are we in that regard?
We have already had a detailed and thoughtful debate in the Seanad on the report. As the Deputy correctly said, the report will be discussed in some detail when it is presented before the Oireachtas Joint Committee on Education and Social Protection. It is important that as many Deputies as possible from all parties and none in this House should give the report serious consideration. The Deputy knows that I cannot indicate what budgetary decisions may be made at this time of the year. However, I am anxious to consider the impacts, particularly on those in low-paid work. I will take into consideration that many people in the 35-50 age group are at work with two or three children but have heavily indebted mortgages. We need to be aware, as I am sure the Deputy is, that child benefit is a very important cash payment to such families, some of whom may have no social welfare income because they were previously self-employed. I cannot give an indication of budget decisions now, but I can say that we are giving very careful consideration to all the different impacts of the changes suggested in the report, how they would be implemented and the timeframe to do so effectively.
