27/09/2012

IBEC Call On Government To Penalise Parents Who Save Child Benefit

Employers' group IBEC has called on the government to penalise people who save their child benefit rather than spend it.

In a submission to Finance Minister Michael Noonan ahead of December's Budget, the Irish Business and Employers Confederation (IBEC) also say that parents who spend child benefit should get a third more than those who put aside the money.

The business lobby group wants to give parents a smart card which would force people to spend the entire amount in Ireland or risk losing some of their benefit.

IBES claim the proposal could provide a boost for retailers; however, it would also hurt those parents who are saving for a rainy day and parents who paid taxes but now live in other European countries.

It is not known whether their suggestion would be legal under European law but IBEC pointed out that the British government hands out vouchers to some people on social welfare.

The employers' group claims parents save a quarter of the €2.4bn paid in child benefit every year.

"IBEC believes that universal welfare payments of this type should be made by an electronic payment card which would incentivise recipients to spend their money in the domestic economy."

It first said back in July that child benefit should be paid using a card but has not previously suggested that those opting to use the card should get a third more than those who take cash.

The business group will also urge Mr Noonan to create a property tax that averages €500 per house next year and applies to as many people as possible. The tax should increase in future years, it adds.

(H)


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