Dáil Éireann debate -
Wednesday, 7 Nov 2001

Vol. 543 No. 3

Written Answers. - Social Welfare Code.

John Bruton

Question:

35 Mr. J. Bruton asked the Minister for Social, Community and Family Affairs if financial disincentives exist for lone parents who choose to marry or cohabit which deter them from so doing; if he proposes to take steps to correct these disincentives; and his views on whether the NESF's recommendation that the matter be further studied by the Oireachtas Joint Committee on Family, Community and Social Affairs is a sufficiently decisive response to this problem. [24845/01]

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

The social welfare system in general is contingency based and assumes that there are economies of scale where two people are married or cohabiting. In the circumstances, under the present system a reduction in income is inevitable where a person changes status from being a lone parent to one where he-she marries or cohabits. Clearly a payment which is based on the contingency of lone parenthood cannot continue where the person marries or cohabits. Where both of a couple are welfare recipients the losses are eased to some extent by payment of the qualified adult allowance.

This issue was examined in detail in a number of reports in recent years, including the report of the working group examining the treatment of married, cohabiting and one-parent families under the tax and social welfare codes, 1999, and the review of the one-parent family payment or OFP, 2000. In neither case was a solution to the problem put forward with the contingency nature of the social welfare system as a whole identified as one of the major obstacles to a resolution. The NESF in its recent report on lone parents also examined the issue and, while it made no definite recommendations, it has put forward some suggestions for further consideration. Its main suggestion revolves around giving lone parents who marry or cohabit access to the unemployment assistance or UA scheme so that they may retain a full personal payment. A household means test would still apply and the UA scheme would be amended to exempt parents from the requirement to actively seek work until their youngest child was five years of age, with a part-time work requirement applying until the child was 12 years of age. The NESF sees the system as needing a much broader application with all qualified adults opting for this conditionality if they wish to receive a full personal rate and work tests also applying to those who remain as lone parents.

Another suggestion involves transitional arrangements whereby one-parent family payment recipients could retain a full payment for a period after they marry or commence cohabiting. The payment of lump sums is also explored as an option. The NESF acknowledges that such arrangements would be difficult to administer and could create other disincentives. They could also place other couples at a disadvantage compared to couples containing a former lone parent. The NESF considers that if its suggestions were developed into a realistic proposal for restructuring of present arrangements they would not only address disincentives for family formation but also the problems associated with the status of women as dependants in the welfare system and the mobilisation of the domestic labour supply.

The NESF suggestions are welcome as a contribution to policy discussion in this area. However, because of the fundamental changes envisaged for the social welfare system and the general principle underlying the changes, I consider that it is appropriate that they should be examined further before any decision is made in regard to implementation.