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Dáil Éireann debate -
Wednesday, 1 Mar 1989

Vol. 387 No. 8

Ceisteanna—Questions. Oral Answers. - Family Income Supplement.

11.

asked the Minister for Social Welfare the number of persons currently in receipt of family income supplement for the year 1987-88; the total cost for each year; and if he will make a statement on the matter.

25.

asked the Minister for Social Welfare the changes proposed in the Blackwell Report on family income supplement; and whether he intends to implement same.

I propose to take Questions Nos. 11 and 25 together.

In keeping with the commitment given in the Programme for National Recovery, a detailed study of the workings of the family income supplement scheme has been carried out and the final report on the review has now been received. The review addressed the main policy issues in relation to the scheme, including the question of the lower than expected take-up.

A main conclusion of the report is that the original estimates of take-up on the scheme were too high. A reassessment of the potential claimant pool revealed a maximum of 20,000 families who would be eligible. Allowing for take-up rates experienced internationally on this type of scheme, the consultant estimated that the maximum achieveable number of clients is unlikely to be more than 12,000 families.

The improvements in the scheme, which I will announce shortly, are being finalised at present taking account of the consultant's report. These will come into effect with the increases in rates of payment generally from July. As already announced in the budget, an additional £1 million has been allocated to the FIS in 1989. This will bring total expenditure on the scheme to over £6 million this year. The additional money will be used to adjust and improve the scheme taking on board the increases in social welfare rates generally and the improvements in the taxation area which were announced in the budget.

The number of recipients of FIS was 5,159 at December 1988 and 5,532 at December 1987. Expenditure on the scheme was £5.11 million in 1988 and £4.40 million in the previous year.

Do I take it that the Minister does not intend to make very radical changes in the scheme, in that there is no reference to amendments in the Social Welfare Bill just circulated. Do I take it also that the Minister has no great hope of any vastly improved uptake in the scheme in that there was an expenditure of £5.1 million for an uptake of 5,159 people whereas the Minister has only allowed £1 million extra for the current year? How then, does the Minister propose to amend this scheme in any realistic way so that it can fulfil the role for which it was originally intended, to help those in low paid employment?

The Deputy is aware that the money provided for the scheme is allocated in the budget and that an additional £1 million has been allocated for this scheme. The changes can be introduced by way of regulation, so the changes do not have to be outlined in the Bill.

Will the Minister agree that this scheme has not been effective in helping those on low pay and that the abolition of PRSI from the first £2,000 or £3,000 of income would be a more effective way of ensuring that everybody entitled to help would get it?

The scheme has been effective for those who have benefited from it. As far as the Government are concerned we have taken another major step this year which involves the allocation of £20 million by exempting those on lower incomes, especially those with families, from tax. That is the way to go about things and that is why I said in the reply that we will be taking these things into consideration in considering what to do with FIS. We will be considering the effect of the tax exemption level on those working for low incomes and we will be trying to make the best use of the additional £1 million which is available.

Will the Minister confirm that part of the problem in the non-take-up of the family income supplement is reluctance to apply because people fear they may lose other benefits, such as the medical card if they get the amount due under the family income supplement?

As far as I remember it was agreed that it would be taken into account for medical cards.

Is the Minister aware that this view has not percolated down to the health board in my area, for instance, and that subsequently, having tabled a question to the Minister for Health, he agreed that it should not be taken into account. There is a breakdown in communications because the community welfare officers obviously have not been aware of that.

It is being taken into account.

I will allow Deputy De Rossa a final question. I want to deal with other questions also.

Does the Minister accept that, whether it is a fact, people fear that they will lose the medical card because of the way the scheme has been promoted and the lack of clear knowledge and guidelines as to how it operates with regard to other marginal benefits, and that this needs to be cleared up if we are to assist the 20,000 people living below the poverty line, as far as the Minister's statistics are concerned.

There are perception problems that will have to be addressed. We can discuss this during the course of the Second Stage of the Bill. There is nothing to stop us fully discussing it at that stage, though it will come in separately by regulations afterwards. The perception of the family supplement is improving as more people are becoming aware of it. However, we even had questions asked here today which showed that some people in the House do not understand how this scheme works. I was asked would people in the Defence Forces be affected. The scheme works in such a way that a family gets a supplement for the whole year even if income rises during that year. Only at the end of the year if the income has gone beyond a certain level is a person reassessed for another full year. It is fairly good that a person would have it for a year even if the income did increase. We will have an opportunity to reassess the whole scheme.

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