herald

Wednesday 20 June 2018

'Families on €100k a year aren't rich', says Leo as he rejects child benefit means testing

Mr Varadkar has contradicted Minister Regina Doherty
Mr Varadkar has contradicted Minister Regina Doherty

A family with a total income of €100,000 should not be considered rich against the backdrop of high mortgage and childcare costs, Taoiseach Leo Varadkar has said.

It came as he rejected a suggestion by Employment and Social Protection Minister Regina Doherty that child benefit could be means tested.

In a striking intervention, his spokesman contacted the Herald to categorically dismiss the idea, first raised last Friday.

The spokesman added that the "average salary" for somebody working full-time in Ireland is €44,000.

Costs

"So a middle income couple where both are working could easily have a combined salary of €100,000. This doesn't make them rich," the spokesman said.

"They have high costs like rent, mortgage, childcare and all the costs associated with raising a family."

At a conference in Dublin last week, Ms Doherty suggested the Government had to weigh up the need "to invest heavily in childcare" against having a "universal payment system".

She told the Institute of International and European Affairs (IIEA) she would look at households earning over €100,000 and receiving child benefit.

She also committed to reviewing the 2012 Mangan Report, which proposed a two-tier system for child benefit payments with low-income families getting more.

However, the minister was forced into a complete U-turn and later issued a statement saying means testing "is not being considered by Government".

Sources say the controversy has caused annoyance in Government circles at a time when Fine Gael was planning to highlight what it sees as unreasonable spending demands being made by Fianna Fail.

Advisers to other ministers were told not to give the original story quoting Ms Doherty any credence.

Mr Varadkar's spokesman said the Government's objective is to make life "that little bit easier for families".

"We've done it in so many ways like two years of free pre-school, free GP visits for young kids, subsidised childcare, reduced income tax and USC and increases in the working family payment," he said.

"Means testing child benefit would very much go against the grain."

When asked about Ms Doherty's comments yesterday, Finance Minister Paschal Donohoe said: "I support the assessment [she] has made in relation to how we manage child benefit into the future. It is a universal benefit.

"In our social insurance system, we have a number of key payments that are universal, and I support the assessment that Ms Doherty has made in relation to how we need to use those payments in the future.

"Really, what myself and Ms Doherty will be working in is the options that will be available to us next year in terms of how the economy might grow."

Mistake

Ms Doherty's constituency rival, Fianna Fail's Thomas Byrne, yesterday accused her of having "to row back" after she had realised "what a huge mistake she had made".

Meanwhile, a new programme of universal supports for parents will form part of an Early Years Strategy to be devised later this year.

The move will be signalled by Children's Minister Katherine Zappone today in a speech where she will also promise to "radically reform the funding model for early childhood care and education".

She will say "significantly more investment" in childcare facilities will be needed in future budgets in order to "reduce the out-of-pocket cost" to parents.

An international expert panel is to be appointed in the autumn to review the current funding model and make recommendations for the next 10 years.

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