In budget 2020, I announced that recipients of carer's payments would be allowed to increase the number of hours they can work, study or attend a training course, outside the home, from 15 to 18.5 hours per week.
Over 1,200 additional family carers are expected to qualify for payment as a result of this change at an estimated cost of €11.6 million. Also, any carer currently working less than 18.5 hours per week can avail of the additional hours.
I prioritised this measure in direct response to the carers I have met over the past number of years who have told me that they found the current number of 15 hours to be too restrictive. An increase to 18.5 hours will accommodate increased participation by carers in work or training to strengthen their connection with the labour force, while also serving the additional purpose of reducing the social alienation that we so often hear is experienced by many carers.
There have been calls to increase the disregard for carer's allowance from carers groups. In deliberating measures for budget 2020, I included an examination of the disregard for carer's allowance. In its pre-budget submission, Family Carers Ireland looked for an increase in the disregard for carer's allowance of €117.50 for a single person and €235 for a couple per week. My Department costed this proposal using the ESRI simulating welfare and income tax changes, SWITCH, model. Allowing for income tax and working family payment offsets, net expenditure is estimated to be more than €55 million per year.
Changes to schemes are considered in an overall budgetary and policy context and from an evidence based perspective. Some 92% of the current recipients of carer's allowance have no means or means of less than €7.60 per week and would not benefit by an increase in the disregard no matter how big. The overwhelming majority of carers can, therefore, benefit from the change in the working hours threshold.
The existing income disregard and means test for carer's allowance is also one of the most generous within the social welfare system, not only in Ireland but across the European Union, with the amount of weekly earnings disregarded at €332.50 for a single person and €665 for a couple. At 18.5 hours work per week, this amounts to €36 per hour for a person in a two-person household and €18 per hour in a single-person household. This indicates that there is significant scope for carers to increase their working hours without impacting their payment. In fact, only 0.1% of current carer's allowance recipients have means of between €250 and €300 per week and it is highly unlikely that any of them will have their payment reduced as a result of choosing to work additional hours.
Carers who would benefit from an increased disregard would be in higher income households. Given the need to target available resources fairly and equitably to those in most need, allowing an increase in the number of hours was the best use of the limited resources available to the Department in the budget. In this context, I have no plans to change the means test conditions for carer's allowance at this point.