ESRI report shows how slashing child benefit hit families

COUPLES with children have fared worse financially than couples without over the last decade, a new report has found.

The report by the Economic and Social Research Institute shows this was due to cuts to Child Benefit and other welfare payments.

In 2008, Child Benefit stood at €166 per month for each of the first two children and €195 for subsequent children before it was cut back to €130 during the recession. Since then, it has been increased to €140 for all children.

This has impacted families with children.

The ESRI report says: ‘Couples with children have fared relatively worse over the past ten years than couples without children, and changes to Child Benefit and other welfare are responsible for this difference.’

The report also notes how a new flat-rate maternity benefit was introduced in 2014. This meant that the top maximum weekly rate fell from €262 per week to €230 before increasing Study: Dr Karina Doorley to €240 per week. The report finds that the falls in income were sharpest between 2008 and 2012.

Assuming that couples share their income fully, it says the average decrease in disposable income for each member of a couple from 2008 to 2012 is 8% for those without children and 8.9% for those with children.

Overall, women were hardest hit by cuts and policy changes.Women in couples without children lost 8.1% of disposable income but women with children lost 11.9%.

In comparison, men in childless couples lost 7.9% of their income and fathers lost 7%.

The report found women spent more on children than men, leaving single mothers worse off after cuts.

The report said that if couples with children do not pool their income, women lose ‘significantly more’ than men, ‘mainly due to cuts in Child Benefit’. Women who were lone parents and ‘inactive’ lost more income than single people with no children.

The upper age limit for children for the One-Parent Family Payment fell sharply from 18 to seven during the crash as parents were pushed to return to work.

Women on lower salaries lost 13.5% of disposable income compared to a 0.6% loss for men from 2008 to 2012.

Dr Karina Doorley, an author of the report, said: ‘Although tax and welfare policies do not typically differentiate based on gender, they can affect men and women differently.

‘Men tend to have higher earnings than women, resulting in different income tax liabilities and benefit entitlement.

‘The gender budgeting tool developed in this project will allow an assessment of the gender impact of any future budgetary changes, an important step in promoting gender equality in Ireland.’

Annette Connolly, director of the Parliamentary Budget Office – which ordered the study – said the findings highlighted the difference of policy impact on men and women, ‘particularly when also considering differences in socioeconomic circumstance’, which will allow gender-proofing in budget 2020.

The report said: ‘Gender differences in the impact of Irish budgetary policy over the past decade have stemmed from the fact that women are more likely than men to be lone parents, to be inactive and to benefit more from childrelated supports.

‘Changes to such supports over the past decade have decreased the disposable income of women more than that of men, particularly those with low earnings.’

Women are hit hardest by cuts