Two tier child benefit system

[Shawady]

It seems the government is looking at having a two tier system for child benefit. I think this is a bad idea. Surely it is going to be another disencentive for someone with a family to take up employment.

Many cite the example of Michael O'leary getting child benefit but how many people earn that type of money.

The projected saving is €200 milion from a budget of €2 billion. Surely a 10% accross the board cut would be fairer.

http://www.rte.ie/news/2012/1002/child-benefit.html

 

[Purple]

I think it should be removed and replaced with a refundable tax credit.
I do not agree with universal welfare payments, be they for children, OAP's, medical cards for over 70's etc. We don't have limitless money so we should target it at those that need it. High income households (those earning over €150k-€200k a year) shouldn't get welfare payments.

 

[ajapale]

One thing about universal benefits is that they cost less to administer. Means tested benefits have to be based on some objective criteria which are then the subject of costly appeals and delays requiring a self perpetuating army of civil servants to investigate and administer.

With means tested benefit there will all ways be an arbitrary cut off point. People finding themselves on the wrong side of the cut off point will feel aggrieved and will point to others (probably farmers and self employed, if college grants are anything to go on) who are in reciept of the benefit.

On balance, in this case, I would prefer the universal benefit but let it be subject to income tax. And let it be subject to voluntary "opt in" this would save us hearing from Ml O'Leary bleating on about how "unfair" the system is.

 

[gianni]

And let it be subject to voluntary "opt in" this would save us hearing from Ml O'Leary bleating on about how "unfair" the system is.

The current system is already opt-in. Ml O'Leary or his significant other applied for the Children's Allowance payments - the same payments that he lampooned as being "paid to have sex".

 

[Shawady]

With means tested benefit there will all ways be an arbitrary cut off point.

This is the problem. A figure of "anyone earning over €100K" is usually bandied about but would enough people fall in to that category to make a significant saving?

I thought low income families get other allowances such as the back to school allowance and medical cards to help them anyway.

 

[Purple]

This is the problem. A figure of "anyone earning over €100K" is usually bandied about but would enough people fall in to that category to make a significant saving?

I thought low income families get other allowances such as the back to school allowance and medical cards to help them anyway.

How about increasing it by 10% then making it taxable?
All income should be taxable anyway.

 

[ajapale]

This is the problem. A figure of "anyone earning over €100K"

Is that €100k per household, per couple, per highest earner. Is that €100k net of levies, prsi tax and income tax?

How is that income calculated for non paye people?

Will eligiability be calculated each year or will it just be determined when the child is born?

Can anyone link to the report referred to today in various media outlets?

How about increasing it by 10% then making it taxable?
All income should be taxable anyway.

I see nothing wrong with this neat solution.

 

[Yachtie]

I think it should be removed and replaced with a refundable tax credit.
I do not agree with universal welfare payments, be they for children, OAP's, medical cards for over 70's etc. We don't have limitless money so we should target it at those that need it. High income households (those earning over €150k-€200k a year) shouldn't get welfare payments.

I agree.

What really riles me is that as a middle-income family with one child, all we get from the state is €140 child benefit per month. If they took it away from everyone, I'd have no issues not receiving it myself. Actually, I would welcome it as a refundable tax credit as I'd know for sure that I'd be getting it back.

On the other hand, we pay hefty amount of taxes, levies, etc., we pay for private medical insurance and our child is not in education system yet. Can somebody please explain to me how it is fair to take €140 away from the family which is (by choice) no burden on the state and give it to a family with unemployed parents, a football team of children living in a council house, in receipt of back to school allowance, medical cards, unemployment benefits, and whatever else they get from the state?

Where is the distinction between genuinely poor (due to illness, disability or genuine lack of opportunities) and members of the hand-out culture, in my opinion also percieved as deliberately poor?

 

[Yachtie]

How about increasing it by 10% then making it taxable?
All income should be taxable anyway.

Ahem, if you are outside of the PAYE system or don't earn enough to pay any taxes, you would just be getting the 10% extra as your tax credits which are given to everyone would cover the tax element.

 

[Latrade]

I wonder just how much of this money is an actual cost and loss to the state and what proportion is returned to the state essentially by the money being spent. I know plenty of middle-income families that, given the rise in other costs and in some cases drop in their incomes, use the benefit for purchase of school books, uniforms or to suppliment their childcare needs.

Tax credits would be the fairest solution in my opinion, but I wonder setting and administering such a system contributes any savings.

 

[Purple]

If the system is changed as proposed will it be called a "Progressive" childrens allowance system since our income tax system that takes more of your income the harder you work is also called progressive?