Dáil Éireann debate -
Thursday, 20 May 1999

Vol. 505 No. 2

Written Answers. - Social Welfare Benefits.

John Gormley

Question:

144 Mr. Gormley asked the Minister for Social, Community and Family Affairs his views on whether the loss of rent allowance is the single biggest deterrent for those people attempting to move from social welfare into the labour market or education; and if he will address this issue in the near future. [13430/99]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

The issue raised by the Deputy is amongst those examined in the report entitled The Disincentive Effects of Secondary Benefits prepared by Goodbody economic consultants which was published recently.

The report sets out to examine the range of issues associated with the interaction of secondary benefits, including the rent and mortgage interest supplements payable under the supplementary welfare allowance scheme, and the incentive to take up employment and training opportunities.

The report found that only a small minority of unemployed people – 15.5 per cent had rent-mortgage supplements. For those in receipt of it, the supplement could have a significant impact on the monetary incentive to take up work. The report noted, however, that the arrangements whereby people taking up work under the back to work allowance or revenue job assist schemes can retain secondary benefits for a number of years largely addresses the problem for these groups.

Following the publication of the report, and in line with a commitment contained in the Partnership 2000 agreement, my Department has initiated discussions with the social partners with a view to devising cost-effective solutions to the employment trap associated with the withdrawal of the rent and mortgage interest supplements. The issues involved are not straightforward, and account must be taken for instance of such matters as the need to ensure equity within the SWA scheme; the impacts of the existing arrangements whereby long-term unemployed people may, subject to certain limitations, retain entitlements; the absence of any similar arrangements for people wishing to avail of FÁS training schemes; and the need to ensure that any proposals emerging from the discussions do not give rise to employment or poverty traps elsewhere within the system.

It is intended that these discussions will proceed quickly so that any proposals emerging can then be considered in the context of the next budget.