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Social Welfare Benefits.

Dáil Éireann Debate, Wednesday - 15 December 2004

Wednesday, 15 December 2004

Questions (86, 87, 88, 89)

Kathleen Lynch

Question:

90 Ms Lynch asked the Minister for Social and Family Affairs the number of social welfare payments which are designed to act as work incentive measures; if such social welfare payments are meeting this objective; and if he will make a statement on the matter. [33452/04]

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Written answers

My Department assists and encourages long-term unemployed and other long-term welfare recipients to return to work, training or further education through a range of measures administered by the Department's employment support service. One significant measure is the back to work allowance scheme which incentivises and encourages long-term unemployed people, lone parents and certain persons with disabilities to return to work by allowing them to retain their social welfare payment — on a tapered rate over a three or four year period — when they take up employment or self-employment.

Introduced in 1993, the scheme has assisted over 110,000 long-term social welfare recipients return to the workforce. Currently, there are 11,744 participants in the scheme, almost 7,000 of whom are engaged in a wide range of self-employment options.

In conjunction with this, my Department's employer's PRSI exemption scheme provides an exemption of the employer's portion of the PRSI contribution in cases where the employer takes on a person in receipt of the back to work allowance for the first time. The period covered is two years providing the employee remains with that particular employer. Since 1995, almost 33,000 employers have been granted this exemption.

Another measure offered is the back to education allowance. This second chance educational opportunity is designed to encourage and facilitate unemployed people, lone parents and people with disabilities to improve their skills and qualifications with a view to returning to the work force. There are two strands to the scheme, second level option and third level option. People qualifying for this scheme receive weekly income support at the maximum personal rate of the qualifying social welfare payment. They also receive the adult/child dependant increases where appropriate. An annual cost of education payment is also payable and I have increased this payment from €254 to €400 effective from September 2005. To date more than 10,000 persons have benefited from the scheme.

In addition, the family income supplement, FIS, was introduced to assist low income families in the active labour force. The scheme is designed to provide income support for employees on low earnings with families and thereby preserve the incentive to take up or remain in employment in circumstances where they might only be marginally better off than if they were claiming other social welfare payments. Weekly payments are made to families with children under 18 or between 18 and 22 if in full-time education, including one parent families. Currently, there are approximately 14,500 families in receipt of FIS, receiving an average weekly payment of over €72. Following the €39 increase in FIS earnings thresholds announced in the recent budget, most FIS payments will increase by €23.40 per week from January next.

A range of other support is provided by the Department's locally based facilitators. Their primary role is to assist the long-term unemployed and other long-term welfare dependants back to work, training or further education by providing them on an individual basis with assistance to access the necessary programmes or supports which their circumstances demand. Facilitators have access to some additional services, including funding to arrange specialised training and supports for those who are distant from the labour market and who need additional help in preparing them for further training and employment.

It is important that social security programmes are developed in ways that are responsive to the needs of the unemployed and other disadvantaged while simultaneously providing opportunities to assist people to become less welfare dependent. In this context, a number of income disregards have been introduced to social security schemes, to make them more employment friendly by removing disincentives to taking employment.

My Department through its employment support and other services has been very successful in assisting people away from the cycle of long-term unemployment and back into the workforce. The services provided are under constant review and I am satisfied as to their continued relevance and flexibility in today's job market.

Question No. 91 answered with QuestionNo. 86.

Willie Penrose

Question:

92 Mr. Penrose asked the Minister for Social and Family Affairs if he will consider an increase in the income thresholds for secondary benefits; and if he will make a statement on the matter. [33440/04]

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Social welfare programmes aim to be responsive to the needs of those who depend on income maintenance support while providing incentives to assist people to become more independent financially, particularly through employment.

A number of measures have been introduced in recent years to remove disincentives to taking up employment and to assist in the transition from welfare to work. These measures include special means disregards and tapered withdrawal of benefits as earnings increase and employment support schemes, such as the back to work programme. In addition, there are facilitators available in my Department's local offices around the country to assist unemployed people and lone parents with the transition to employment.

The income limit referred to by the Deputy applies to people who take up employment under approved employment schemes. Such people are entitled to retain certain social welfare and other benefits, known as secondary benefits, in total or in part, for the duration of the scheme subject to certain conditions.

For most people, the most significant secondary benefit is rent or mortgage interest supplement, which is paid under the supplementary welfare allowance scheme.

An income limit of €317.43 per week applies to these supplements. While this income limit has not changed since its introduction, significant other improvements have been made to the means test. Back to work allowance and family income supplement, in cases where one or both of these are in payment, are now disregarded in the assessment of the €317.43 weekly income limit. PRSI and reasonable travelling expenses are also disregarded in the means test.

In effect this means that people who had been unemployed and who commence employment with the support of the back to work allowance can have a weekly household income significantly in excess of the €317.43 limit in question and still qualify to retain 75% of their rent or mortgage interest supplement. For example, in the first year on the back to work allowance, a single person can have combined income from the back to work allowance and wages of €418.50 while a couple with two children can have an income of up to €510.75 a week. When the latest increases in social welfare rates become effective in January 2005, the levels of income in these cases will increase to €429 and €528.25 respectively.

Other improvements have also been made to the retention arrangements. The period for which rent or mortgage interest supplement may be retained has been extended to four years on a tapered basis — that is, 75% in year one, 50% in year two and 25% in years three and four. In addition, the maximum payment limit of €317.43 per month on the amount of supplement payable has been abolished for people on approved schemes.

As a consequence of these improvements, many families retain more of their rent or mortgage interest supplement than had been the case prior to these changes taking place. In addition, people availing of an employment support scheme may opt to be assessed under either standard supplementary welfare allowance rules or under the special retention rules and will be entitled to receive payment under whichever is the more favourable option for them. In that context, I was glad to be able to increase the income disregard in the standard rules of the scheme from €50 per week to €60 per week in this year's budget.

Overall, I consider that the current secondary benefit income eligibility thresholds and disregards, coupled with improvements in the standard rules of the supplementary welfare allowance scheme, ensure that people have a financial incentive to take up back to work opportunities. I will consider further improvements in the standard rules of the scheme in the context of future budgets.

Bernard J. Durkan

Question:

93 Mr. Durkan asked the Minister for Social and Family Affairs if he will increase the basic social welfare threshold to ensure that a budgetary increase does not result in a reduction in rent support for those in rent assisted accommodation; and if he will make a statement on the matter. [33528/04]

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Bernard J. Durkan

Question:

175 Mr. Durkan asked the Minister for Social and Family Affairs when it is likely that the basic social welfare payment will be increased; and if he will make a statement on the matter. [33781/04]

View answer

I propose to take Questions Nos. 93 and 175 together.

The supplementary welfare allowance scheme provides for the payment of a weekly or monthly supplement in respect of rent or mortgage interest. These supplements assist with reasonable accommodation costs of eligible people who are unable to provide for their accommodation costs from their own resources and who do not have accommodation available to them from any other source. The scheme is administered on my behalf by the health boards.

Rent and mortgage interest supplements are subject to a means test. They are normally calculated to ensure that, after payment of rent or mortgage interest, an eligible person has income equal to the rate of basic supplementary welfare allowance appropriate to his or her family circumstances, less a minimum contribution, currently €13, which each recipient is required to pay from his or her own resources.

Many recipients pay more than €13 because each recipient is required to contribute any additional assessable means he or she has over and above the basic supplementary welfare allowance appropriate to his or her circumstances towards his or her accommodation costs.

I have decided not to increase this minimum contribution level this year. In addition, I have provided for an increase of €14 in the weekly rate of basic supplementary welfare allowance, effective from January 2005, which matches or exceeds the increases in virtually all other social welfare rates.

I am satisfied that there will be no reduction in the amount of rent or mortgage interest payable in the vast majority of cases. Almost all people on rent supplement will retain the full value of their increased social welfare payment as a result. This significant increase in basic supplementary welfare allowance will also have the effect of reducing the additional amount people with other means have to pay above the minimum rent contribution level in some cases. For example, single people on rent or mortgage interest supplement who are aged 66 years or more will get a net increase of €14 per week as a result of this year's budget.

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