Child poverty

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1 Debates: Child poverty and child benefit

Senators again returned to the issue of poverty (Seanad Eireann, Debates, 19th February 2013, 203).   Jillian van Turnhout (ind, Taoiseach nominee) drew attention to the increased level of child poverty in Ireland and that the Children’s Rights Alliance, in its annual report card, had given the government a F grade.  Rarely does the alliance hand out an F grade, she said.  If child poverty were to remain unaddressed, it can continue into the teenage years and cause a significant life risk of poverty.  On the day of the publication of the Mangan report, Ivanna Bacik (Lab, Dublin University) pointed out that although the rates of child benefit here might be high by international standards, the outcomes had been very poor if we looked at our child poverty rates (Seanad Eireann, Debates, 20th February 2013, 248).  We now needed to look at how to best tackle child poverty in a meaningful way through social welfare payments.

 

Opening a Seanad debate on the report of the advisory group on tax and social welfare on child and family income supports (the Mangan report), the Minister for Social Protection, Joan Burton, told senators that child-related payments cost €2.8bn or 14% of the total €20bn welfare budget (Seanad Eireann, Debates, 26th February 2013, 339- 353).   This included Family Income Supplement, clothing and footwear allowances.  Although Irish levels of direct payments were high, they were less effective at reducing child poverty.  A key challenge was to achieve greater targeting while improving poverty outcomes and employment incentives.

 

She welcomed the proposal that child benefit should be retained as a universal benefit.  The group had explored the taxation of child benefit as a reform option, but it did not contribute to an overall better system design and there was a preference for a two-tier design.  It had proposed a universal payment coupled with a second-tier payment for low-income families which would also replace Family Income Supplement.  The government had made no decision yet, given the complexities of the issues.  She was conscious of the importance of child-related services and supports, because in other countries, like Scandinavia, they had achieved better child poverty outcomes.  She had asked the senior assistant secretary in charge of operations in her department to commission an outline of how reforms could be implemented and the timelines involved, the minimum likely time being 18 months.

 

Paschal Mooney (FF, agricultural) drew attention to the commentary given on the report by one of the group’s members, Mary Murphy, quoting a savings of €200m from the proposals but that she had used the term that the Department of Public Expenditure and Reform was ‘hovering like a vulture’ over the Department of Social Protection.  So far, €700m had already been cut from child benefit since 2009.  Now more than 100,000 children experienced consistent poverty, which had risen from 8.7% to 9.3% and child deprivation rates had risen from 25% to 32%.  It was a sad reflection, he said, that one quarter of children now lived in jobless households.  Suggestions had been made that more and more child benefit money should go into services instead, an approach which could be implemented on a staggered basis, but this was not something that could be done in the present financial climate.  All one could see, he said, was not reform but more cuts and the money disappearing back into the exchequer and the hovering cultures.  

 

Fidelma Healy Eames (FG, labour) spoke of how she had originally favoured a two-tier system but was now coming down on the side of taxation.  She did not understand why 90 staff were required for a child benefit section in Letterkenny when a tax-based system could be operated through the Revenue Commissioners.  A two-tier system with a cut-off point of €25,000 would squeeze middle class families who got no additional benefits like medical cards but were having to pay for everything.  She cited the case of families skipping doctors and dentists because they could not afford them.

 

Returning to the issue, Jillian van Turnhout spoke of the concern of all members about child poverty.  She cited warnings that the uncompensated for reductions in child benefit would lead to more child poverty.  She believed in not just investment in payments but also in quality childhood services, early childhood education programmes, afterschool services, universal healthcare and schoolbooks, as advocated by the Society of St Vincent de Paul.

 

For Marie Moloney (Lab, labour) the provision of 6,000 extra places for childcare last year after the reduction in child benefit was welcome, but more must be done.  She came from rural Ireland and she knew how difficult it was for parents in rural Ireland to access childcare, much of which was based in urban areas.  She did not support the taxation approach, because a family with children and a good income might appear to be well off, but were not once all their deductions were considered.  Many middle class families were having to put their child benefit payments to meet mortgage payments.  Taxation would be messy and complicated.

 

Sean Barrett (ind, Dublin University) told the senate that he disagreed with the principle of universalism.  It was not a principle for him and he could not think of a less worthy use of child benefit than to give it to people earning €250,000, who would get €3,360 a year.  We cannot have a system, he said, in which everybody is a beneficiary and no one wants to pay in – this was the basic flaw of universalism.  The report was also wrong on taxation, for he could not see why one would tax work harder than welfare.  His other concern was that two thirds of people on Family Income Supplement would be worse off under the two-tier system.  We also had to tackle the disability-invalidity sector, which had grown rapidly and was producing households in which no one worked.  We had not addressed the question of why this happened during a booming economy or why we have twice as many people in invalidity and disability payments as any other country.

 

John Kelly (Lab, admin) agreed with the idea of a universal payment, with a supplement for needy families, but there was no need to pay high earners and he suggested a cut-off point of between €100,000 and €150,000.  Feargal Quinn (ind, National University) spoke of how we could not sustain a basic social welfare payment of €188 that was twice the amount paid in Britain and Germany.  We must encourage job creation and we cannot have a disincentive.  Any country that spent €20bn of its annual €36bn tax take on welfare was clearly dysfunctional.  It did not make sense to pay children’s allowances to millionaires and we must make a change to encourage jobs and people at work.  It was sensible and worthwhile to do this without being overly generous with benefits.

 

Trevor O Clochartaigh (SF, agricultural) urged the minister to disregard the report’s proposals, for they would only increase child poverty.  They would further impoverish middle and lower income earners who were being constantly squeezed.  If the government really wanted to tackle high income earners, then it should introduce a 48% tax band on those over €100,000.  The books could be balanced without cutting child benefit.  This payment went largely to women, who were more likely to be in poverty and cutting it would create considerable hardship for women.  

 

Meantime, pressed by Willie O’Dea (FF, Limerick city) as to whether he accepted the proposals of the Mangan report, the Tanaiste, Eamon Gilmore told him that it would be discussed at Oireachtas committee (Dail Eireann, Debates, 21st February 2013, 773-4). The government had not taken any decision, because it did not want to prejudge the debate.  Willie O’Dea told him that granted that the impact of a two-tier system on poverty would be minimal, income earners in middle Ireland would be hardest hit and the effects on employment incentives would be mixed, it would hardly be worth the trouble.  

 

The Dail returned to child poverty on a topical motion presented by Robert Troy (FF, Longford Westmeath) (Dail Eireann, Debates, 21st February 2013, 848-852).  He highlighted the ‘F’ (fail) grade given to the government on cuts in child benefit, the D grade given to health and children with special educational needs and the E grade for equality and non-discrimination.  All this happened during the first full year in which there had been a minister for children and there was a case to be made that her advocacy for children had been inadequate and that she was lacking in influence.

 

Replying for the government, the Minister for the Environment, Community and Local Government, Phil Hogan said he was disappointed with the deputy’s negativity.  He pointed out that the report card, the fifth in the series, gave the government an overall C grade, B in chapter 5 and an A grade for the referendum.  Robert Troy though complained that the legislation to set up the new Child and Family Support Agency, which was to be set up by December 2012, had still not been presented.  The greatest issue of all was the inability of the government to keep people out of poverty.  The minister told him that the legislation would be published ‘this session’. 

 

Child poverty figures in Ireland were the subject of an adjournment debate in the Seanad (Seanad Eireann, Debates, 28th February 2013, 646-648).  Kathryn Reilly (SF, industrial & commercial) quoted Eurostat figures to show that Irish children were more likely to face poverty than in 22 out of the other 26 states of the European Union, 38%.  She expressly criticized the insufficient investment in youth services, with a 10% cut this year.  Responding for the government, the Minister of State at the Department of Jobs, Enterprise and Innovation, John Perry told her that €53.173m was allocated to youth work programmes in 2013, with the focus on consolidating provision and safeguarding frontline programmes for disadvantaged communities.  Even with savings of 10% on 2012, this remains a significant level of funding.   Officials had met with representatives of the youth sector to ascertain their views as to the best ways to minimize the impact of budgetary constraints and had exhorted youth organizations to determine where cost savings could be achieved.  The department had begun a formal, comprehensive value for money review of youth funding that was expected to report by mid-year.