Government consider new targeted child support payment in social welfare reform

The government are looking at a major reform of the social welfare system and potential introducing more targeted payments – they are consulting the public on what they need

The government are looking at introducing brand new payments in what would be a major reform of the Irish social welfare system.

Targeted child support payments and payments aimed at people of working age are two that are being considered.

Minister for Social Protection, Dara Calleary TD, has this week launched a discussion document and consultation process on the potential new payments.

The proposed new payments aim to reduce child poverty through establishing a standalone weekly payment for low-income families with children, and to remove ‘cliff-edges’ in payments which discourage people from taking up additional work.

The draft proposals for the introduction of the two proposed payments are contained in a ‘Discussion Document’ published by Minister Calleary.

There have been calls to replace the current system with a single stand-alone targeted child payment, also known as a “Second-Tier Child Benefit”, as part of the government’s commitment to reducing child poverty.

One possible approach for a targeted child payment is to create a new separate weekly payment for low-income families with children. It would replace the current Child Support Payment and Working Family Payment. How it could work:

• it would be for families on low income. The families would not need to be getting any another social welfare payment
• the amount paid would depend on their household income and how many children are in the family
• similar to the current Child Support Payment, there would be a set amount for each child in the family. The amount paid would be higher for children aged 12 and over
• families with lower incomes would get the maximum rate. The payment would gradually reduce as the household income increases
• it would not affect the universal Child Benefit payment, which is to stay the same

Jobseeker’s Allowance is the main income support for people who are unemployed, or working part-time. While it works well, in some cases, in can discourage people from taking on extra hours. This is because earning more can mean losing the payment.

The government has committed to introducing a Working Age Payment to make sure that work always pays.

One option is to replace Jobseeker’s Allowance with a new payment where people are paid an amount based on how far their income is below a set threshold.

• if someone earns more, their payment would reduce gradually, instead of stopping suddenly
• this would avoid the “cliff edge” where people lose their payment all at once

If introduced the new working age payment would be:

• for people between 18 and 66
• it would apply no matter how many days or hours they work
• available to single people, couples and families with children

No decisions have yet been made as to what changes, if any, will be made to the social welfare system. Ultimately, informed by this consultation the Government may decide to:

• Keep things as they are,
• Keep the existing system, but change some of the rules of the existing payments, or
• Introduce a more fundamental reform based on discussions and feedback

Minister Calleary said: “Our existing social welfare system has been consistently one of the most effective in the EU at reducing poverty, so it is important we examine all options when considering any changes. To this end, this discussion paper sets out our current system; provides some arguments both for and against making changes; and suggests ideas designed to generate discussion around such changes.

“I am keen to hear the views of stakeholders on this discussion document, but I am also open to other ideas about how the system might be improved to address child poverty and support low-income households.”

The final designs of both potential new payments will be considered following the consultation process. The existing Child Benefit payment will remain unchanged and will not be impacted by the introduction of any potential new payments.

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