Extra Child Benefit payment would lift 55,000 children out of poverty, says ESRI
It estimates that spending just under €800m a year on the scheme could halve the number of children experiencing consistent poverty.
Families eligible for the scheme would get an extra means-tested payment worth an average €145 per month.
The amount paid would vary depending on the household income and number of children in the family.
All parents would continue to receive the universal €140 Child Benefit payment for each child, which is paid from birth until the 16th birthday.
Child Benefit is paid for children up to the age of 18 if they have a disability or are in full-time education or training.
Other reforms included increases to the Working Families Payment, child support payments and Child Benefit
Karina Doorley, an author of the report and associate research professor at the ESRI, said introducing second-tier Child Benefit would award €145 on average per month per child to eligible households. She said the amount paid would be higher for lower-income households and lower for higher-income households. It would cost €772m a year.
Ms Doorley said the new payment would be separate from the universal payment of €140 a month, which would stay in place.
'All children would be entitled to the existing €140 per month Child Benefit payment,' she said.
'Some low-income children would be entitled to a second payment, averaging €145 per month, but higher or lower depending on their income level.'
The report said a 'proposed second tier of means-tested Child Benefit emerges as the most cost-effective option' after examining a range of tax and benefit system reforms to reduce child poverty.
Other reforms included increases to the Working Families Payment, child support payments and Child Benefit.
'We find that the introduction of a second tier of Child Benefit would be the most cost-effective way to reduce child AROP (at risk of poverty) rates,' the report said.
'It is also an effective way to reduce child deprivation and consistent poverty. We estimate that spending just under €800m annually on such a scheme could halve the number of children experiencing consistent poverty.'
There should be a serious look at a targeted Child Benefit payment. It's the only way to make a real dent in child poverty rates
The research said a second tier of means-tested Child Benefit would reduce the child 'at-risk-of-poverty' rate by 4.6 percentage points (lifting 55,000 children out of income poverty) and consistent poverty by 2.1 percentage points (lifting 25,000 children out of consistent poverty).
Ms Doorley said a second-tier Child Benefit system has been suggested before, but this analysis examines its impact on deprivation and consistent poverty.
'What we're suggesting is there should be a serious look at a targeted Child Benefit payment,' she said.
'It's the only way to make a real dent in child poverty rates.'
However, she said the scheme is not without problems and the incentive to work while receiving it would have to be examined.
The report noted that the Programme for Government commits to exploring the introduction of a second-tier Child Benefit.
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