Written Answers. - Social Welfare Code.
Jan O'Sullivan
Question:
136
Ms O'Sullivan
asked the
Minister for Social, Community and Family Affairs
the plans, if any, he has to implement proposals on the integration of the tax and social welfare systems; the way in which he plans to address inequality of treatment and opportunity for dependent spouses; and if he will make a statement on the matter.
[6311/99]
The question of the integration of the tax and social welfare systems was examined in detail by an expert working group which reported in 1996. The expert group's report set out comprehensively the poverty traps and work disincentives in the present tax and social welfare systems, reviewed a number of possible approaches to reform and set out priorities for future development of the system.
Having examined options for total integration of the tax and social welfare systems, the group concluded that total integration of the two systems was not the most appropriate way forward, but that greater co-ordination between the two systems was needed. The two key priorities identified by the group were: reform of child income support and tax reform. Both of these issues are being actively tackled by this Government.
As regards reform of child income support, since coming into office I have given particular priority to the reform of family income sup plement. The 1998 budget provided for the reform of the scheme so that entitlement is now calculated on a net income basis rather than on gross income, as was previously the case. This measure was introduced with effect from 1 October 1998. In addition, the income thresholds were increased by £7 per week with effect from June 1998. The 1999 budget includes provision for a further increase in the income thresholds of £8 per week with effect from June 1999.
In addition, I have continued the policy of focusing on increasing child benefit as opposed to the child dependant allowances paid with social welfare payments. Since child benefit is paid to all families, regardless of income or employment status, it does not affect the incentive to work. The policy of increasing the role of child benefit, relative to child dependant allowances, has helped to improve incentives to work.
The second priority identified by the group was the need to pay particular attention to the taxation of people on low incomes. This Government has already made considerable progress on reducing the tax burden. In particular I would remind the Deputy of the tax changes announced in the December budget by my colleague, the Minister for Finance.
The budget provided for a substantial increase in personal tax allowances of £1,050 for a single person and £2,100 for a married couple. Furthermore, the standard rating of personal and PAYE allowances means that the value of this increase, and indeed any future increases, will be concentrated on those in lower and middle income groups.
Dependent spouses are provided for in the social welfare system through the payment of qualified adult allowances where their spouses or partners are in receipt of a social welfare payment. Such allowances are payable under nearly all the schemes operated by my Department. The qualified adult allowance is paid at about 60 per cent of the full personal rate, which is in line with the 1986 recommendations of the Commission on Social Welfare, and is designed to reflect the fact that it is considered that there are economies of scale where two people are living together.
An interdepartmental group, chaired by my Department, is currently examining the treatment of different types of households under both the social welfare and tax systems. The group is, among other things, charged with identifying and costing ways of ensuring consistent and equitable treatment of different types of households including married, co-habiting and one-parent households under both systems. The establishment of this group also marks the first stage in meeting the commitment in the national anti-poverty strategy to examine the individualisation of social welfare payments. The group will complete its work in the next few months and we must await the report to see what measures are proposed before deciding on further action.
With regard to the question of opportunities for dependent spouses the position is that in accordance with a commitment given in Partnership 2000 a working group has been established to review the question of access by women to labour market opportunities. This group is due to report later this year.
