A means-tested child welfare payment is “worthy of consideration” in budget talks, the Taoiseach has said following a recommendation by a think tank.
The Economic and Social Research Institute (ESRI) published a report on Thursday that suggested a payment to households based on their means and the number of children could take more than 40,000 children out of poverty.
It said such a payment would cost around 700 million euro a year and benefit more than 100,000 households – and reduce the share of children below the poverty line by a quarter.
The ESRI argued that a “second-tier” of child benefit is far more effective at reducing child poverty than increases in universal Child Benefit or means-tested Increases for a Qualified Child (IQCs).
Just over 15 per cent of children in Ireland were living in poverty last year, according to figures from Social Justice Ireland.
Responding, Taoiseach Leo Varadkar said that a package in the budget will be aimed at reducing child poverty.
He added: “In 2020, Ireland’s income inequality reached an all-time high, that is income inequality reached an all-time low, and we reached close to our lowest ever poverty figures.
“There’s been a setback in the last year or two and that’s arisen largely because of the increase in prices and the cost-of-living crisis that people will be very aware of, and we need to turn the tide again and make sure that we’re reducing consistent poverty again, and that income inequality is narrowing.
“There are lots of different ways to do that. I’ve had a chance to just scan the ESRI report on child benefit there today. It’s certainly worthy of consideration, and I can absolutely guarantee you that one of the themes in the budget is going to be child wellbeing and child welfare.
“We will have a package as part of the budget and that will be aimed at reducing child poverty.
“There’s different ways you can do that. One really important way is increasing wages, particularly for the low paid. Another way which (Minister for Further and Higher Education) Simon Harris is working on in particular is helping more lone parents in particular to get involved in education.”
He said only people in full-time third-level education can qualify for the SUSI grant, which makes it difficult for lone parents to qualify.
Asked about whether there would be a 10 euro increase in child benefit, Mr Varadkar said no decisions have yet been made on “specific elements” of the welfare package.
He added: “What ESRI report points out today, which I think is valid, is that a targeted measure targeting children in households where there is poverty and where there’s deprivation would give us a better return on investment than maybe giving every family an extra five or 10 euros a month and I think they make a good case.”
Minister for Children Roderic O’Gorman told reporters that his “strong” view is the IQC and the working family payment “work really well”, and said he would like to see “further investments in those in this year’s budget”.
He added: “We’ve increased them in the last three budgets, I’d like to see them being increased further in this year’s budget, but I think the proposal brought forward by the ESRI today is certainly worth consideration.”
He added: “We didn’t place a strong focus on one off payments. Our department I suppose it’s more in terms of the provision of services and one-off wouldn’t be hugely beneficial in terms of any of the provision in my department.”
When Minister for Public Expenditure Paschal Donohoe was asked would government spend 700 million euro on this measure, he answered: “We are nowhere near yet making a decision in relation to what individual measures will be.
“Supporting children, the reduction of child poverty will be a theme of the budget. The Taoiseach has established the new units in the Department of the Taoiseach to look at how we can give kids the best start to life and look at how we can reduce poverty levels.”
