Vol. 558 No. 5
74 Mr. Ring asked the Minister for Social and Family Affairs the reason her Department underestimated the take up of the FIS payments arising from changes in budget 2002; and if she will make a statement on the matter. [24726/02]
Family income supplement, FIS, is designed to provide income support for employees with families, who are on low earnings and thereby preserve the incentive to remain in employment in circumstances where employees might only be marginally better off than if they were claiming other social welfare payments.
The calculation of FIS payments is based on a family's net earnings and the number of eligible children. Payments are made on a weekly basis over a guaranteed period of 52 weeks. Following the increase of €34 in FIS income limits from January 2002, there were 11,796 people availing of the family income supplement at the end of November 2002, compared with 11,739 in December 2001.
I assume the Deputy is referring to the fact that the 2002 Estimates for FIS at budget time overestimated spending on the scheme this year. In effect, this occurred because both the number of recipients and the average value of payments turned out to be lower than had been expected.
It is difficult to estimate FIS take up following changes in income limits with any precision as it is influenced by a wide range of factors such as employment growth, earnings growth, taxation changes, the income distribution of lower earners with families and the extent to which people are aware of the scheme. The lower than expected spending in 2002 is probably the result of a combination of these factors.
The improvements made to FIS over the years together with the measures taken to increase awareness of the scheme resulted in a steady increase in the level of take up during the 1990s, peaking at 14,686 families at the end of 1999. Since then, although income limits have been increased annually to take account of improvements in the rates of other social welfare payments, the numbers in receipt of FIS have declined somewhat, probably reflecting the fact that fewer people now require the supplement.
I believe this should be viewed as a positive trend and highlights the success of a range of Government measures which have improved net take home pay for the lower paid.
This day last year, the famous Minister for Finance told us that there would be 2,500 people availing of FIS. Only 400 extra have done so. That was misinformation given by the Minister. It was not the only bit of information he gave us last year. I suppose we will have to listen to more of it in a few minutes' time in relation to the economy. The people who were affected—
Will the Deputy put his question?
A Leas-Cheann Comhairle, you should give me a chance.
The Chair has given the Deputy every chance.
I will make it simple for you, a Leas-Cheann Comhairle. How did the Minister get his figures so wrong? Is that a difficult question for the Minister who was not able to get his figures right at all last year?
The reason that the take up was low is because people moved beyond the threshold into better income. We increased the thresholds and the value of lower paid work. Therefore, the necessity of the supplement has been eroded, but that is not to say that the scheme does not exist to support families in need. It is an excellent scheme and reflects positively on the Department.
Does the Minister think it is fair that, in the case of somebody in receipt of an FIS whose income changes dramatically during the year for the worse, the Department will not review the payment at that time? It will not review it or increase the FIS payment. People have to wait. If somebody is in receipt of FIS, it means he or she is on a low income. If a person's income is reduced again, is it fair that he or she has to wait until the payment comes up for review months later?
Will the Minister tell us why only 400 people have availed of FIS this year?
There are 11,796 people availing of FIS. I am aware of the anomaly that it is a 52 week supplement. For some it is a gain and for others it is not. I will be reviewing it and I cannot anticipate my colleagues.
Can we be hopeful?
Are we not all?
Written Answers follow Financial Resolutions.
