Tuesday, February 26, 2013

Calling Time on Universal Child Benefit

A new Eurostat report on child poverty has shown that Irish children under the age of 18 suffer some of the highest risk of poverty in the European Union.

The report ranks Ireland at number 5 out of the 27 EU countries in terms of risk to child poverty poverty.

Those at risk of experiencing poverty live in a household where the income is less than 60% of the net median equivalised income threshold.

Speaking on Tonight With Vincent Browne last night, the omnipresent economist Dan O'Brien commented that the child poverty figures in Ireland persisted in spite of a significant budgetary allocation towards the social protection of children. This is true. 

If we look at the most recent Eurostat figures on social spending aimed at children and families, which include cash transfers and benefits in kind, we see that the Irish allocation is far higher than all other Western European states bar Luxembourg. It is also well above the wider EU average. 


The fact that Ireland spends more on children than the vast majority of European governments, yet its children are the fifth most at risk of poverty in the EU, clearly demonstrates that our child protection system is seriously deficient.

Interestingly, Ireland spends only half of the EU average on protecting its elderly population, and yet these are some of the least at risk of poverty, within their age cohort, in the EU. Only the Czech, French, Dutch and Lux over 65s fare better than their Irish counterparts.

Of course, this apparent contradiction may partially be explained by the fact that Ireland has the youngest population in the European Union, with a small old age dependency ratio, and a rapidly growing younger population with a higher young age dependency ratio. So of course we are going to spend more of our domestic income on our youth, right?

Well, that's still not enough to explain away the problem. While Ireland's Young Age Dependency Ratio is 20% larger than the EU average (table 2.8), we are spending about 40% more than the EU average, and still getting some of the worst results.

In 2011 the state spent just over €2 billion on universal Child Benefit payments.

The universality of such an enormous payment can no longer be accepted, given the dire Eurostat findings in relation to risks of child poverty in Ireland.

Once again, the state is seriously neglecting its most vulnerable children. 

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