The €1,000-a-year grandparent grant could cost “many hundreds of millions of euro” to introduce and administer, according to senior Department of Finance sources.
Finance Minister Paschal Donohoe is also understood to be seriously concerned over the impact the grant would have on the State’s finances in the forthcoming Budget.
The minister also has reservations about how the scheme would be administered, monitored and who would be entitled to the funding.
“There are big questions about this policy,” a source close to the minister said.
“It’s all well and good until you start looking at a policy that could end up costing many hundreds of millions of euro,” the source said.
However, Mr Donohoe has tasked his officials with costing Transport Minister Shane Ross’s budget demand.
Mr Donohoe previously said he would discuss the proposal with Children’s Minister Katherine Zappone. However, the Children’s Department washed its hands of the proposal.
A Department spokesperson said the ‘granny grant’ did not come under the “minister’s remit” as Mr Ross suggested it would be administered by the Department of Social Protection. Social Protection Minister Regina Doherty did not respond to requests for comment.
However, other Fine Gael ministers are furious with Mr Ross for suggesting the introduction of a costly proposal when the Government is trying to appear prudent ahead of the Budget.
“We are coming under pressure to show a surplus this year and we are talking about prudence but Ross is coming out with this stupid stuff,” a minister said. Another minister said it was a “mad proposal”.
It has also emerged Mr Ross raised the grandparent grant directly with Taoiseach Leo Varadkar during a meeting this week. A Department of the Taoiseach source said it was too early in Budget negotiations to say whether the proposal would become Government policy.
Mr Ross estimated the grant would cost the exchequer around €71m. This is based on figures suggesting there are around 70,000 grandparents who meet the requirements to be entitled to the grant. Only grandparents who mind grandchildren for more than 10 hours a week would be entitled to the funding.
Mr Ross added confusion to the debate on Wednesday when he suggested aunts and uncles who care for children could also be entitled to the grant. He also said all four grandparents of the same grandchild would be able to apply for the State cash. This means one family could potentially receive €4,000 a year for child-minding duties.
Meanwhile, the Independent Alliance set out a number of budget demands in negotiations with Mr Donohoe. Junior Minister John Halligan has called for gambling taxes to be increased from 1pc to 2pc. Mr Halligan also wants to dramatically increase the number of counsellors available to third-level students. The alliance also want the bereavement grant reintroduced.