Child benefit cuts a logistical nightmare
CUTS to child benefit for higher earners are not expected to be included in the Budget.
The Government has yet to resolve the administrative problems of means-testing the payment and so cannot bring in the measure. In the last Budget, an across-the-board cut to the benefit reduced it from €166 a month to €150 for each of the first two children.
However, a cut specifically targeted at the better-off would require an upgrading of the Department of Social Protection's IT system. It would also be a drain on already stretched resources in the department.
Child benefit is estimated to cost the exchequer €2.26bn this year, down from €2.5bn in 2009.
The Minister for Children, Barry Andrews, said that moves to means- test the payment "hasn't progressed".
He said the "same problems are there as were there before".
Another difficulty surrounds the issue of the Revenue Commissioners having the information to means-test married couples but not cohabiting ones.
Nevertheless, Mr Andrews hinted he would like to see a graduated payment. He said it was very hard to justify a situation where high earners were receiving child benefit on the basis of tax paid by people on much lower incomes.
Mr Andrews did not rule out an across-the-board cut this year, though he highlighted the problems by doing so.
"The middle classes are as badly affected or worse affected than some people might think and reductions in what basically amounts to income is almost penalising people and it's a real worry for them. That's something we can't ignore at this stage," he said.
Mr Andrews was responding to the news that the British government is planning to axe child benefit payments to parents by 2013 if one of them earns £44,000 (€50,950) or more.
He said he understood where the British chancellor of the exchequer, George Osborne, was coming from but said he was not quite sure why he was putting it off until 2013. Child benefit is paid to the parents or guardians of children under 16 years, or under 18 if the child is in full-time education, in FAS training, or has a disability.
It is €150 for one child; €300 for two children; €487 for three children; and €674 for four children. Parents of eight children receive €1,422 each month.