herald

Friday 18 August 2017

Child benefit for high-earners to be cut in Budget

Joan Burton. Photo: Damien Eagers
Joan Burton. Photo: Damien Eagers

THE Government is zoning in on high earners who will have their child benefit cut in the Budget, following upgrades to the State's computers.

The path is clear for the Department of Social Welfare to identify families who most require the payment, thanks to the extensive IT improvements.

Initial plans to slash payments to those who earn more money were delayed by the lack of a link-up between computer systems at the Department of Social Welfare and the Revenue Commissioners.

Although a significant number of families on higher incomes offered to return the payment, there was no facility for them to do so.

And when questioned on the disconnect between Revenue and the department, Social Welfare Minister Joan Burton said that, although she favoured taxing child benefit, it would require "a fair amount of work" on IT systems.

"Means testing would involve a huge amount of administrative and bureaucratic effort. I think we have to find neater solutions than that," she added.

But the Herald has now learned that there is now no technological barrier to identifying high earners.

"The department has collaborated with the Revenue Commissioners on a number of technical issues, including the sharing of data," a spokesman for the minister said.

It is understood that there are some 113,500 people earning above the €100,000 threshold, which Ms Burton has said she favoured taxing.

However, following the Mangan Report on tax and social welfare, the minister is now also considering introducing a two-tier child benefit system.

The report suggested two options: taxation of the benefit or a two-tier payment with a top-up for families on low incomes.

 

Budget

The taxation option would see child benefit reduced by 20pc or 41pc, in line with the tax rates, according to the report.

The minister's spokesman said that the decision on reform to the child benefit system would be made in the Budget.

hnews@herald.ie

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