Means-tested child benefit tier could take more than 40,000 children out of poverty

A new means-tested child benefit tier could take more than 40,000 children out of poverty, according to research published by the Economic and Social Research Institute (ESRI).

A report published by the ESRI on Wednesday, and funded by Community Foundation Ireland, has shown that child poverty could be reduced by a quarter if a means-tested second-tier child benefit were introduced.

With an estimated 170,000 currently below the poverty line, this is equivalent to taking more than 40,000 children out of poverty.

Such a reform would provide for all households with children to receive a payment determined by their means and number of children, and has already been recommended by the Commission on Taxation and Welfare, the National Economic and Social Council, and the Children’s Rights Alliance.

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The ESRI has estimated that introducing the payment would cost about €700 million per year.

Dr Barra Roantree, assistant professor of economics at Trinity College Dublin and co-author of the report, said that a “substantial body of evidence” finds that poverty has a negative effect on a child and later life outcomes, “particularly when it starts in early childhood and persists throughout”.

Senior research officer at the ESRI and another author of the report, Dr Karina Doorley, said that introduction of the second tier of child benefit would help to address child poverty.

She highlighted that child poverty is “something the Government have placed renewed emphasis on with the establishment of a Child Poverty and Wellbeing Programme Office in the Department of the Taoiseach”.

[ Fintan O’Toole: Elevation of child poverty to national priority a genuine political breakthrough ]

The report says that a second tier of child benefit would be “far more effective” at reducing child poverty than similarly costed increases in universal child benefit or means-tested increases for qualified children, which the ESRI says would reduce child poverty by less than half as much.

The ESRI noted, however, that undertaking such a reform would force the Government to confront some of the “implicit choices” made by the structure of the current welfare system, “that are rarely discussed”.

The institute said this included whether the welfare system should incentivise low-income individuals to engage in part-time work.

Denise Charlton, chief executive of Community Foundation Ireland, said that targeted child supports for families most at risk of deprivation and poverty are a “proven way to narrow the inequality gap”, and has been the subject of a “decade-long debate” in Ireland prompted by child advocates.

“As a philanthropic hub with 5,000 community partners we believe the potential it offers to lift tens of thousands of children out of poverty is, on the back of this research, worth serious consideration by policymakers in the context of Budget 2024 and future budgets,” she said.