Wednesday, October 10, 2012

Should we means test child benefit ?

As we seem to be getting a lot of questions on means testing child benefit benefit,  I thought it was time to share a piece written asking that very question!



                                ''Should we means test child benefit?''

The government has talked about this issue many times, and on Thursday the 19th of July  the IMF said yes, means test it!!!!  But is it the right decision?  That is the question.

As it stands, child benefit is a universal payment made to all children regardless of parental income.  Is this a good thing? I think yes, it shows we value all children, and we are investing in their well being and supporting our future tax payers.  It shows that we value all children equally, regardless of social standing, and this should remain so. 

But why should the rich get it I hear you ask!!  Now before you all say yes, remove it from those that do not need it, let's think about this and look at the bigger picture.  What will this achieve? How rich do you need to be? If we look at the very rich in the country with children their number is very small, so will it save the money the government want to save? No.... so they will have to lower the bar to include more people.  The consequences of this will be that people who need it will lose it, at a time when the cost of living is still very high in Ireland, where childcare costs are on a par with the cost of paying back a mortgage, so that many will give up work as they can no longer afford childcare, to me this is a backward move as the government will lose out on tax revenue and the potential job losses that could affect creches and childminders as well will result in less tax and increased dole queues.  It will create poverty traps and widen the poverty bracket. 

This would reverse the progressive moves that were made in recent years to reduce poverty levels by increasing the amount paid.  Some will argue that this may not be the best way to target poverty levels, but gains were made nonetheless. 

Now let's look at the rate of child benefit. We are always told that child benefit is very high in comparison with our EU counterparts and the rest of the world, when the government is trying to justify cuts.  Let's see if it is really that good... 

Child benefit is the ONLY payment made towards children in this country, if we look at what other countries invest, we can see that they receive a payment like child benefit, but ALSO children are recognised in the tax system ( in Ireland you can get a tax break for a race horse but not for a child) subsidized childcare, free health care and education.  Will we see the government moving to be more like this and bringing us up to standard?  Again no, I think this is a revenue collecting exercise, and no reinvestment will happen in the foreseeable future. So by agreeing to means testing I can not help but feel we are cutting off our nose to spite our face. 

Instead of removing money from children, should we not take a look at their parents' income, and ensure they are paying the right rate of tax.  Also  it's long overdue to include recognising children in our tax system. 

Many groups have completed documents comparing Ireland to other EU countries, and have found us substandard and below par, the OECD has said we need to do more, and surveys run by the department of pensions in the UK rated us very low compared to other countries.  That was in 2008 before the cuts, so I would say we are further down the list now.  Below are some links supporting this :
 
OECD links
 
The above link is to a survey comparing child benefit packages in 22 countries, compiled by the Dept of Work and Pensions in the UK.  It was subsequently validated and used by the Australian authorities to benchmark their package.
 The key data is summarised at the start, pages 1 to 13.
The conclusion on page 13 is also key, it puts the countries into 4 groups ranked in descending order (Leaders, 2nd, 3rd, Laggards). Ireland is in the 3rd group.  The main reason for this is the high cost of rearing children and the dearth of services for children
Also National women's council of Ireland

I could go on, there is a very long list of documentation supporting the idea of doing more for our children.

I am also wondering why was it not suggested that the government take a pay cut or abolish unvouched expenses and ensure receipts are handed in before handing over monies.  We have failed miserably in protecting children in this state, and this was the one area where  we have made progress, yet now we will regress and move backwards.  An old saying goes'' invest in a child invest in a nation."

The government should remember that before touching child benefit again. 
 
By Niamh Kelly  PACUB member
 
Links : 



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