Time to dust off experts’ plan and bring in reforms

THE minister’s office in the Department of Employment Affairs and Social Protection at the top of Busáras enjoys panoramic views over Dublin. Slightly less appealing are the shelves where numerous reports on reform of the social welfare system are stacked gathering dust.

If Minister Regina Doherty wants guidance on how to go about changing the child benefit system, there’s a ready-made report sitting there. It recommends a two-tier child benefit system through meanstesting or taxation to target support at low-income families.

There’s plenty of dust on that report by the Advisory Group on Tax and Social Welfare already. The report was given to then social protection minister Joan Burton in March 2012, yet wasn’t published until February 2013 – only after it was leaked to this newspaper.

The expert group, chaired by respected barrister Ita Mangan, said there was “no one perfect method” of targeting child income supports but concluded the “preferable method” was a two-tier payment.

The idea was a lower universal payment for all families, with a top-up for those on low incomes.

The goal was to reduce poverty and minimise disincentives for low-income parents to take up a job.

Child benefit was reduced that year from €140 a month per child to €130, when the public finances were still recovering. The €140 level was restored in later years.

The Mangan report specifically recommended not reducing child benefit with no other change.

At the time, the group estimated the move towards a two-tier payment would

have resulted in those over a selected high income threshold losing up to €53 of the then €130 monthly payment per child.

Up to 400,000 parents of nearly 700,000 children would have been hit.

The arbitrary figure of a family income of €100,000 was thrown about as the threshold.

It appeared low if both parents were working in jobs on wages of about €50,000, placing them firmly in the squeezed middle-income bracket.

The pressure to reduce the social welfare budget eased as the economy recovered and there has been a focus on other payments for those on low incomes to eliminate poverty traps.

But the morality of paying €140 a month to millionaires with children still leaves a bad taste in the public mind.

Where to set the bar was always the problem.

Successive governments have shied away from means-testing, citing administrative obstacles.

The move would be cumbersome and possibly take up to 18 months to implement, but it would be possible, especially with the greater co-ordination of information between Government agencies.

An opinion poll four years ago for this newspaper showed strong support for means-testing.

Rising childcare costs are now providing the impetus for reform. But is there the appetite to tackle this great untouchable?