In 1994, the means test for the lone parent's allowance scheme was adjusted. The previous earnings disregard of £6 for each child was replaced by a flat rate earnings disregard of £24. Where earnings exceed the new disregard, the amount of lone parent's allowance payable is now reduced by £1 for each £2 earned. The disregard of travelling and child-minding expenses have been continued.
This change was introduced in recognition of the special circumstances faced by lone parents in terms of labour force participation. As noted in the interim report of the Expert Working Group on the Integration of the Tax and Social Welfare Systems, lone parents are likely to be out of the labour market for relatively long periods and may face greater disincentives than other categories of social welfare recipients when considering taking up employment. The working group, in recommending improvements along the lines which have been introduced, also argued that the rationale underpinning the different treatment of the lone parent's allowances is one which recognises the difficulties which are specifically related to the lone parents.It was in this context that the improved disregards for the lone parent's allowance was introduced.
The issue of extending the new means test provisions to other social welfare categories will be kept under review.
