This measure increases the monthly Child Benefit rates in 2016 by €5, from €135 to €140 per month.
Child benefit is a universal payment paid to families with children. It contributes to the costs of rearing children and promotes horizontal equity between households with children and those without. The latest 2013 SILC data show that households with children have an average equivalised income of €20,111 per annum, compared to €22,329 for households without children. This represents a differential of almost €2,000 per annum or 10%.
Child benefit was reduced by €10 per month in 2012, as part of the fiscal consolidation measures required under the Troika programme. This increase brings the rate back to €140,which was the rate when the Government came into office in 2011.
The increase in child benefit recognises the sacrifices that low and middle income families made during the economic crisis. It is also an investment in children and their future. As such, it is consistent with Government commitments set out in its Statement of Priorities, to deliver a new deal on living standards to ensure that the economic recovery is felt by low and middle-income families.
The impact of the economic crisis on all families is reflected in the high share of children experiencing basic deprivation who are in non-income-poor households. Two-thirds of such children are in low and middle income families (mainly the 2nd, 3rd and 4th quintiles).
As child benefit is paid to mothers, it contributes to the sharing of resources within households and helps to prioritise the needs to children and women. The universal nature of the Child Benefit also helps to avoid unemployment traps as people move from welfare to work.
The combined value of child benefit, QCIs and the Back to School clothing and footwear allowance will rise to €64 per child per week. This is the equivalent of 34.4% of the adult welfare rate.