Budget lays out cash injection for families with children

Low income families with children which did not benefit from the tax cuts for high income earners enacted in 2013 and carried on as planned in this budget, are the main beneficiaries of the budget. 

As a result of the estimates for 2015 a family with two children earning €11,000 will benefit from a cash injection of  between €835 and a maximum of  €1,935.

This family will benefit from a €400 supplement for each child and a €35 bonus. 

If both parents work and the woman earns less than €3,000 this family will also benefit from an “in work” benefit of €550 per child.

A single parent who is in employment and has a child, will get an extra €1,635 consisting of a €400 child supplement and €1,200 “in work” benefit.

22,000 children in 9,000 families earning less than €11,900 a year will benefit from the child supplement of €400 for every child until the second child, and €200 from the third child onwards.

The measure will cost the state coffers €9 million.

The benefit will only apply to families whose household income is less than €11,900, i.e. less than €1,000 a month.

But the supplement will be conditional on a school attendance rate of 95%, with “the aim of improving the children’s education and psychosocial health”.

The government will also introduce an “in-work” benefit scheme which will be paid to low to medium income families where both spouses are in employment and have dependent children up to 23 years of age. 

The benefit which will cost state coffers only €2 million, will only be applicable to couples “where the woman earns less than €3,000” and to cases where both parents earn the minimum wage.

Families where only one spouse works will not benefit from this new allowance but single parents in employment will benefit.  

Curiously, couples where both parents work but the woman earns more than €3,000 will not be eligible.

With regard to families with two parents, the benefit will start at €200 per child for those earning between €10,000 and €10,399 shooting up to €1,000 for those earning between  €11,900 and €17,099. The benefit decreases to €730 for those earning €17,900.

With regard to single parents the benefit increases from €800 for those earning between €6,600 and €6,699 to €1,200 for those earning between €8,200 to €9,099 decreasing to €120 for those earning between €14,400 and €15,000.

This means that a family with two children where both parents work and earn €12,000 can benefit from an extra €2,000 in cases where the woman earns less than €3,000. A single parent with one child, earning the minimum wage, will earn an extra €1,200. 

The budget does not offer any benefit to low income earners who do not have children.

Instead of increasing the minimum wage, the state will be taking upon itself the cost of subsidizing the incomes of low income people. 

Lower middle class families with one bread winner, which are also excluded from tax cuts, are also largely overlooked in the budget.

The carrot and the stick

Young people aged between 16 and 23 years of age who do not attend training will not be eligible for unemployment benefits. Single parents will be exempted until their youngest child is one year old from joining this training programme.

All new claimants for social assistance benefits, under the age of 23, will have to participate in the Youth Guarantee programme. Existing recipients of social assistance, under the age of 23 years, will be given a time window of four months to enter Youth Guarantee.

Single parents on social assistance will retain a part of their benefit even if they earn more than €56.94 a week.

Single parents who become employed will retain 65% per cent of social assistance for the first year, 45.0 per cent for the second year and 25.0 per cent in the third year. Their employers will also be incentivised by being given 25% per cent of the benefit for three years.

From the start of next year, a person who is receiving social benefits and gets married, or forms a civil union with a person in employment, will no longer lose entitlement to social benefits immediately after the union. Instead, the social assistance will be reduced gradually over a period of three years.

Maternity leave

A special fund financed by a small contribution paid by employers will be set up to finance the full 14 weeks of maternity leave. All private enterprises will contribute according to the number of workers they employ. This measure is aimed at addressing discrimination against women at hiring stage, as employers will still contribute to the fund if they employ only males.

Women in self-employment will have their maternity benefit rate increased to the minimum wage for their 14 weeks of maternity leave.