The squeezed middle can’t give much more

TODAY will see the start of a process which officialdom has dodged for a long time.

Social Protection Minister Joan Burton will present a report to Cabinet on future options for child benefit payments – a report which she has had for almost a year.

This newspaper published details of the report on Saturday and today we bring you more significant details about the potential impact of changes on middle and lowerincome families.

Child benefit is a very important part of many families’ day-to-day budgeting. It is also a huge factor in government spending accounting for some €2bn per year. In the boom times the payment was vastly increased as a catch-all remedy for poor childcare services and the pressing need to get more young mothers into the workplace.

Let us be frank and say that child benefit was also used by Fianna Fail to help win the 2002 general election with the fortuitous timing of paying increases and accumulated arrears. As recession bit deeper on taxpayers' funds the debate has switched to be one about cuts.

This year a €10 cut for first and second children and an €18 cut for third children yielded savings of €140m.

Today's report focuses on the principle of better directing payments towards less well-off families in the greatest need.

The document dismisses the prospect of means testing and leans heavily towards using the tax system to claw back some of the payment from higher income families.

A positive aspect is that it supports social cohesion by suggesting that all parents net some money under a twotiered system.

The alarm bells will begin to sound, however, when the details become more apparent. People who fall into the middle income sector look set to lose out most.

Life has already been most difficult for these people as they have had to do more with less income over the past five years.

These are the same people who fret about the future of their jobs and puzzle over where they will get more money to pay the property tax which kicks off in July and water charges which will follow soon afterwards. In summary, we must contend that the squeezed middle may be unable to stand much more.

A debate on the best use of taxpayers' money to support child welfare is long overdue. But this is a complex issue requiring serious thought.

The Government must tread carefully as ministers plan their next steps.