Cut in child benefit to hit all after new U-turn

Agent Smith

From this mornings Irish indo

LOW-income families will bear the brunt of child benefit cuts following another embarrassing Government U-turn.
Instead of means testing child payments as it promised in the Budget, the coalition has now discovered it has no option but to bring in a flat-rate reduction.
It is understood major legal obstacles arose over Finance Minister Brian Lenihan's plan to tax the benefits.
Proceeding with a 10pc flat cut in the rate will mean a drop from €166 to €150 a month for each of the first two children, and from €203 to around €180 for each subsequent child.
For a low-income familywith three children that would mean a reduction of €55 a month and would represent a substantial cut in disposable income.
The decision will further inflame anger at the Government and lead to claims that the most financially vulnerable are bearing an unequal share of the burden.
The Department of Finance last night confirmed it was aware of "legal issues" with both taxing and means-testing of child benefit payments.
However, the Irish Independent has learned the Government will be forced to abandon its plans altogether because of insurmountable legal and logistical difficulties.
Government officials have spent weeks trying to find an alternative to introducing a flat rate cut for all, but to no avail.
One problem is that the Constitution guarantees the State will support families, which is taken to mean all families alike.
Mr Lenihan desperately needs to slash the Government's €2.5bn bill for child benefit payments, which has more than doubled since 2001 when major increases were ushered in by then-Finance Minister Charlie McCreevy to compensate for inadequate child care facilities.
The Government's economic woes deepened further yesterday after the European Commission predicted the economy will shrink by 9pc this year.
Unemployment
Ireland will have the biggest budget gap in Europe with a deficit of 12pc of GDP this year, rising to 15.6pc in 2010. It will also have one of the highest unemployment rates in the EU.
Mr Lenihan clearly signalled in the Budget that the cost of child benefit payment would have to be cut.
But senior civil servants have said that they cannot apply a means test to the universal payment because of the avalanche of work it would generate.
There are 600,000 families and 1.15 million children in receipt of child benefit -- and the paperwork involved in setting an income threshold and checking claims would be "immense".
There are also concerns that legal difficulties would arise with any difference in the treatment of cohabitees, separated and married couples.
The payment may not be able to be taxed either -- because it has been legally regarded as the income of the child.
Labour spokeswoman on Finance Joan Burton last night said the Government could never have delivered on its promise to tax child benefit.
"Means-testing is horrendously expensive and potentially extremely difficult to administer," she told the Irish Independent.

Now maybe its just me, But i know some people that really do depend on this money to help raise their children.

inforfun

Well, maybe it is just me but as soon as people get in trouble because child benefit is cut, there is something else wrong.
People take kids, let them take care of them themselves too then. Too many see a child as a way to get extra income it seems to me.
It is still way too high.
If a couple can only afford to raise 1 kid, they shouldnt take 3.

luckat

inforfun wrote: »

Well, maybe it is just me but as soon as people get in trouble because child benefit is cut, there is something else wrong.

<snip>

Too many see a child as a way to get extra income it seems to me.

<snip>

If a couple can only afford to raise 1 kid, they shouldnt take 3.

Hmm, you've got a cash-saving idea there, inforfun - people who've lost their jobs and can't pay their mortgage or buy food, obviously shouldn't have their children; the state should take the children and put them quietly to sleep. More work for cash-strapped consultants, too.

spank_inferno

luckat wrote: »

Hmm, you've got a cash-saving idea there, inforfun - people who've lost their jobs and can't pay their mortgage or buy food, obviously shouldn't have their children; the state should take the children and put them quietly to sleep. More work for cash-strapped consultants, too.

That isnt the point the previous poster was making.

Anyway, the flat rate reduction was always likely to happen.
Means testing is better in an ideal situation, but if there is any gov department that is overworked at the moment is the Dept of Social welfare.

r0nanf

Surely at this point Lenihan's position is finally untenable. How many financial f*ck ups do we need? The gross/net debacle was embarassing, but repeated climbdowns and U-turns due to what seems to be a lack of research is simply not on.

Daithinski

It seems to me that the government is using "legal reasons" as a catch all for all their u-turns.

First they can't make the changes to TD's income for legal reasons. (unspecified)

Now instead of taxing the childrens allowance they are cutting it across the board for "legal reasons" (unspecified)

A cut across the board impacts more adversely those on a lower income.

Its business as usual from Crusty the Cowen and Fianna Failure.

spank_inferno

r0nanf wrote: »

Surely at this point Lenihan's position is finally untenable. How many financial f*ck ups do we need? The gross/net debacle was embarassing, but repeated climbdowns and U-turns due to what seems to be a lack of research is simply not on.

Your dead right.

This isnt the first time that he has come out with a "solution" only to have to U-turn because he didnt have the ability to think his solutuion through after step one.
It smells like all their big ideas for reducing spending were almost made up on the spot. This man cannot and should not be allowed to peform this badly and yet remain in power.

Where only This thing nominated as minister of finance. We may criticise its level of inaction, but at least its consistent, would make fewer mistakes and cost less!

bladespin

Jebus this government are a complete joke, U turns on everything, anyone want to moun a good challenge against the income levy? Bet thet'd drop it like a hot coal if they were fought on it, WEAK!

97i9y3941

load of bollox,once again this gov favors the rich,so the farmers and the businessmen will be getting it regardless how much they earn.

Morrisseeee

Isn't it amazing how the 'not-so-well-off' didn't do tremendously well through the 'fat-cat/celtic-tiger' years, and now when the sh1t hits the fan, the 'not-so-well-off' get HIT the worst !! :eek: Fianna Failure indeed, with a big capital FF. They have no regard for the poor & aged in our society, and are totally cowardly when it comes to taxing the rich !

saol alainn

As someone in a lower-income family, of course I'm disappointed that child benefit 'had' to be interfered with. However, there are ways of getting around means-testing, if you have the money, and the only ones affected would be PAYE workers. I lived in a country where child benefit was means tested and I can assure you, the doctor's children received much more than the factory worker's children. Of course it's not fair! But unless everyone's truthful about their earnings, the loopholes would still be there for the rich/higher earners.

What gets my goat is that the only U-turns are those involving these same rich/higher earners, ie TD's, etc. It's always "legal reasons" that prevents measures applying to them. "Legal reasons" my foot! I agree totally with spank_inferno. Even if these excuses were true, it only confirms the idea that Lenihan just wrote the stuff the night before. Like the mortgage tax relief fiasco. If they knew it would take at least a couple of months for all applicants to be processed, why did they not defer its implementation till then? Till it was all worked out? Or, better still, why didn't they find something that taxes those who got us into this mess, rather than us? But, I forget. That would be taking on the Holy Trinity..themselves, bankers and developers. And that's blasphemous.

OK. Rant over. Thanks for 'listening'.

97i9y3941

yes well i did laugh when they said means testing it would be unconstitutional,so if that was the case,everyone person should be entilted to the dole regardless of what they earned/payed for the time they worked!

ejmaztec

We all know that the government lacks any economics know-how, given that they are mostly made up of teachers and lawyers, but one would expect them to know about the law before the budget measure was announced.

Morrisseeee

^^ Fixed your comment: We all know that the government lacks any economics know-how, given that they are mostly made up of teachers gobsheens !!

/hope you don't mind

Sleepy

Why not just scrap child benefit altogether; increase social welfare allowances for dependent children and introduce a tax credit of some form for lower earners with children?

Any 'legal issues' are based on the same book of legislature as the myriad other laws Lenihan would have had to weasel his way around as a barrister - surely he knows better than most that a loophole seems to exist in Irish law for virtually any purpose?

ejmaztec

Morrisseeee wrote: »

^^ Fixed your comment: We all know that the government lacks any economics know-how, given that they are mostly made up of teachers gobsheens !!

/hope you don't mind

Not in the slightest. I was going for the subtle approach for a change.:P

Fighting Irish

Agent Smith wrote: »

From this mornings Irish indo



Now maybe its just me, But i know some people that really do depend on this money to help raise their children.

That's their problem, if they had children without being in the position to raise them then they fooked up, I'm sick of this world looking after the stupid

Idbatterim

thank god its not means tested! why should those that pay everything, be the first to be stripped of everything! people shouldnt be having kids based on €200 a month! the only ones that abuse it are the future spongers anyway!

irish_bob

Morrisseeee wrote: »

Isn't it amazing how the 'not-so-well-off' didn't do tremendously well through the 'fat-cat/celtic-tiger' years, and now when the sh1t hits the fan, the 'not-so-well-off' get HIT the worst !! :eek: Fianna Failure indeed, with a big capital FF. They have no regard for the poor & aged in our society, and are totally cowardly when it comes to taxing the rich !

those on wellfare and especially our senior citizens are looked after extremly well in this country , they are in receipt of much higher handouts than the uk for example which itself has a relativley generous wellfare state

dresden8

For a hot-shot barrister Brian Lenihan seems to know fnck all about the law.

Every time he opens his mouth about what he's going to do we find out that "the law" won't let him.

Was he out sick the day they did constitutional law, or did the dog eat his homework?

greendom

Shockingly bad if this turns out to be true. Hopefully poorer families will receive some form of "legal" compensation to make up for the loss

eamonnm79

greendom wrote: »

Shockingly bad if this turns out to be true. Hopefully poorer families will receive some form of "legal" compensation to make up for the loss

I think you are making a mistake there. You think that this policy is an unfortunite accident that cant be helped due to law.
If it happened once it would be an accident but every time they are finding legal reasons they cant help the least well off and legal reasons why they cant stop helping the better off. FF know they are gone at the next election and are getting through as many right wing borderline, evil things through government before they are thrown on the scrap heap.
The top people in FF are suffering from severe cognitive dissonance.

Paying 7 billion in tax payers money for a 25% stake when they could have had it all for 1.3billion.
That is the greatest looting operation since the start of the state. full stop.
And how much protest from our galant media? feck all! and why? How much advertising do you think AIB and Bank of Ireland do with the main broadsheets
We need to nationalise quickly before the banks loose this money on us too.