Tuesday, January 31, 2006

Child benefit allowance

I hadn't thought about this before, but the child benefit system is ripe to be ripped off - B I G—T I M E. The government pays €460.50 each month to the parents (the mother, generally) of any family with three children. If you have a child under 6, you get an extra €1,000 per year. This money is not taxed.

This is the government's way of helping parents cope with the costs of raising children. There are essentially no tax breaks for children.

Fair enough, I guess, but if you've moved here from Poland or Latvia, that's a tidy sum each month. Now, if the Latvian family is living in Ireland then there is no issue. However, Fine Gael claims that €150m in child benefit payments will leave the country as many E. European workers here have not relocated with their families. This is all legal and how the system was designed.

However, what's not mentioned is how easy it would be to go on collecting the child benefit payment even after the worker has returned home. You only have to claim every six months and the cost of the flight will be far less than the payment.

I can't think of any way the government could easily prevent this, unless they start paying visits to the homes of E. Europeans who have registered for child benefit. And, if they find a house with 7 Polish men living there, how will they know that one of them is or is not the one whose name appears in the benefit book? This could get ugly. You have to bear in mind that wages in Latvia, Poland, Lithuania, etc. are LOW. {The average Lithuanian hotel worker earns €237 per month, for example.)