Let wealthy look after themselves and use child benefit to help families who actually need it
SO Social Protection Minister Regina Doherty has stepped back from the ledge on the question of child benefit by saying she was after all committed to the universality of this muchloved payment. In this she follows a well-worn path. Nobody prods the hornets’ nest of universal benefits lightly. It would take a very brave politician to try it.
But perhaps we need to think about this a bit more. We never like to concede this point but the fact is that Ireland – despite our awful rental and housing crisis – is a rich country.
According to the Central Bank, the net worth of Irish people rose to €726.8bn at the end of last year, or to €151,657 per person.
Of course, not everyone feels rich. Nor is everyone.
Because while the top 1pc of earners account for more than 10pc of wealth, one in nine Irish children lives in consistent poverty. Theirs are the families that are struggling to cover basics such as housing, food, heating and clothes. Theirs are the families where kids sometimes arrive at school hungry.
Surely this is the context in which we have to look at the issue of reforming the child benefit system.
For someone living on, say, €200 a week, a €140-a-month child benefit payment is a small fortune.
For someone operating on a household income of €100,000 and more (as many recipients of child benefit are), it’s simply not the same.
The €2bn universal child benefit payment may well be something many people believe is fundamental to a fair society, but it is not resulting in fairness.
Vast tranches of taxpayers’ money are paid each year in child benefit to households that regard the money as a useful extra, but not much more than that.
Hand on heart, I fall into this category. While certainly never rich enough to save the money, I have spent child benefit at times on crèche fees, at others on clothing or books, occasionally on things like extra-curricular activities.
Could I have managed without? Well, yes, at a pinch. Would my child have missed out? Probably, yes, a bit. Would she have been hungry? Absolutely not, ever.
There are also wealthier households – let’s be honest here – in which the child benefit money is automatically funnelled into college savings. In a small proportion of very affluent households – I personally know one or two – it’s not really noticed at all.
Middle-income families will counter that they are stretched in these days of exorbitant housing costs and many will say they rely on child benefit to cover things like the cost of school uniforms and books.
One could certainly argue about the cut-off point before benefits are removed.
But the fact is Ryanair billionaire Michael O’Leary – who has four children – would automatically rake in more than €500 a month in benefits (if he didn’t refuse to take it, as it’s understood he does). He once memorably called child benefit “a subsidy for sex”. By what measure – when we have kids going to school without coats – can we stand over that?
Critics of calls from business groups to cut child benefit for higher earners and channel the savings into a childcare scheme for all will say the notion is imposing on people a careerist ideology that many Irish people simply don’t relate to.
They will argue that access to affordable childcare is simply not what everyone wants, or needs. They will say that if children were asked, they’d never opt to be cared for by anyone other than their own parents.
THIS is a fair point. Ibec is interested in facilitating more employment, and in attracting more women to the workforce, not in what might or might not be best for children, and so we need to see its arguments in context.
In the past, it has proposed replacing the present child benefit with a smart card system that would penalise anyone who doesn’t spend their benefits immediately in the wider economy.
It doesn’t like the idea that child benefit might go into savings accounts because it wants the money in circulation.
And yet, whatever we make of Ibec’s ideology, it is right about this: unless we consider means-testing child benefit to at least some degree, Ireland’s wealthiest households will continue to rake in cash from the State that they absolutely don’t need, while the poorest ones remain mired in poverty.
The UK has already tackled this contentious issue with a policy by which individual parents who earn less than £50,000 (€57,000) a year get full child benefit, those earning £50,000-£60,000 get a reduced benefit and those earning more than £60,000 (or €68,000 per person) get nothing.
We have been sadly confronting our own nation’s long inhumanity to young women and children.
These are days in which we cry for the babies illegally adopted from mother and baby homes, and mourn for the girls whose helpless poverty once landed them in Magdalene laundries.
But what of our present? Naturally, none of us want to lose out on benefits. Very few of us feel what you might call wealthy. But shouldn’t we nonetheless allocate our resources to the children that most need it?
Ibec is right about this: unless we consider meanstesting child benefit to at least some degree, Ireland’s wealthiest households will continue to rake in cash from the State that they don’t need, while the poorest ones remain mired in poverty