The issue of paying family income supplement through the tax system was considered in late 2002 by a working group established under the Programme for Prosperity and Fairness to examine the role which refundable tax credits can play in the tax and welfare system. The group was made up of representatives of the social partners and was chaired by my Department.
A perception existed at the time that the take up of the FIS scheme was low, that it was not reaching intended beneficiaries to the extent that it might and that payment through the tax and payroll systems might help in that regard. The take up of the scheme had peaked at about 14,700 at the end of 1999 but had subsequently declined to 11,700 at end September 2002. However, the examination undertaken suggested that some of the perceived disadvantages for eligible persons under the existing system, for example, the need to make an application to a State agency, could apply equally to FIS paid through the tax and payroll systems. The examination also suggested that it would probably not prove feasible to introduce a system whereby FIS would be paid automatically to eligible persons through the tax and payroll systems because of the complexities involved for employers and for the Revenue Commissioners.
I understand that since 2002, the numbers availing of the scheme have risen significantly. Average annual numbers of claimants for the years 2002 to 2004 are 11,716, 12,265 and 13,508, respectively. In the week ending 14 January 2005, there were 14,637 claimants. The improved take up may be due to a number of factors, including generous increases in FIS income thresholds over successive budgets, an increase in the minimum weekly FIS payment to €20, expansion of the economy and greater flexibility in working arrangements.
Having regard to the improved level of take up, I do not see that there is a pressing need to carry out a further examination along the lines proposed by the Deputy.