From Iceland — Government Child Support Payments To Be Cut

Government Child Support Payments To Be Cut

Published October 4, 2010

Government child support payments will be significantly reduced, according to sources close to RÚV, if the Minister of Finance’s proposed budget it passed. The minister defends the decision, saying taxes will be lowered instead.
The cuts would specifically be made to children under the age of seven, with reductions at about 20%. As an example, a couple who earn about 190,000 ISK per month, combined, with a child under seven would normally receive about 194,000 ISK per year in government child support. This figure would be reduced to 154,000 ISK.
Part of the reasoning behind the cut is to make these payments no longer connected to income, as has been the case up until now – parents earning high incomes receive smaller payments, and vice versa. This is expected to change. Couples with a combined income of 250,000 ISK per month or greater will no longer receive the payments.
Minister of Finance Steingrímur J Sigfússon told RÚV that the proposed cuts will be offset for low income families by being spared the tax hikes that will be affecting families in higher income brackets. In fact, low income families have seen their taxes reduce.

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