Dáil Éireann debate -
Wednesday, 2 Jun 1999

Vol. 505 No. 7

Written Answers. - Social Welfare Benefits.

Michael D. Higgins

Question:

22 Mr. M. Higgins asked the Minister for Social, Community and Family Affairs the threshold above which people lose secondary benefits in regard to the back to work area allowance; when the threshold was last increased; if he will increase it in line with earnings increases over the same period; and if he will make a statement on the matter. [14589/99]

Liz McManus

Question:

35 Ms McManus asked the Minister for Social, Community and Family Affairs the number of people participating in the back to work allowance and area allowance schemes; and if he will make a statement on the matter. [14596/99]

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

I propose to take Questions Nos. 22 and 35 together.

The back to work allowance, introduced in 1993, is designed to encourage the long-term unemployed to return to the active labour force. The scheme has proved to be a significant success with over 27,450 persons currently participating in employment and self employment. A further 7,000 are participating on the back-to-work enterprise allowance (formerly known as the area allowance).

An important feature of both schemes is that participants are allowed to retain their secondary benefits for the duration of the schemes provided that the combined gross household income is less than £250 per week. This limit has applied since 1993 and the majority of participants retain entitlement for the duration of the schemes.

The key secondary benefit affected by the £250 limit is the rent and mortgage interest supplement payable under the supplementary allowance scheme. The retention of the medical card is not affected by the operation of the limit.

I recognise that the operation of this limit can give rise to disincentive, particularly in the case of persons with families. This issue was highlighted in the recent report published by Goodbody Economic Consultants entitled The Disincentive Effects of Secondary Benefits.

In line with a commitment in Partnership 2000, my Department recently initiated discussions with the social partners in regard to issues associated with the withdrawal of rent and mortgage interest supplements under supplementary welfare allowance. The £250 limit will be reviewed in that context.

I am confident that both schemes still remain sufficiently attractive to the majority of long-term unemployed persons to take up employment and self-employment opportunities. Persons with families who take up employment under the scheme may also qualify for family income supplement.