Mary Upton
Question:133 Deputy Mary Upton asked the Minister for Social and Family Affairs the outcome of the pilot studies in relation to support services and activation measures for lone parents. [34864/08]
View answerTuesday, 21 October 2008
Questions (52, 53, 54)
Mary Upton
Question:149 Deputy Mary Upton asked the Minister for Social and Family Affairs her plans regarding the ending of the cohabitation ban for lone parents in receipt of one parent family payment. [34867/08]
View answerWritten answers
I propose to take Questions Nos. 133 and 149 together.
The Government discussion paper, "Proposals for Supporting Lone Parents," put forward proposals to tackle obstacles to employment for lone parents and other low income families.
Under the proposals the lone parenthood category of payment would no longer exist. Instead, a new payment would be made to all parents (living alone or with a partner), with young children, on low income.
The non-income recommendations contained in the discussion paper were examined in two areas: Coolock and Kilkenny. These studies, which took place between November 2007 and February 2008, were carried out to facilitate the development of the policy and operational details of the new scheme. The process involved both lone parents and qualified adults. It was carried out on a voluntary basis and the take-up was low.
The experience has however highlighted how both lone parents and qualified adults are not a homogenous group, are of different ages, have experienced different routes into their current situation and have different needs. Educational levels of those who participated were generally low, there was little or no engagement with FÁS, some participants intended to return to full or part-time work when their child was a few months old; others, however, had been out of the work force for a considerable period of time. Earnings from previous employment were generally low. In Kilkenny access to transport was an issue with regard to taking up employment or training, with those outside the city of Kilkenny having problems in this regard. For almost all of those intending to return to work affordable childcare is a critical issue.
The experience of this engagement process is feeding into the development of our approach to working with lone parents and qualified adults to support them into education, training and employment.
Eamon Gilmore
Question:134 Deputy Eamon Gilmore asked the Minister for Social and Family Affairs the expected saving to the Exchequer from each of the various measures announced in Budget 2009 in respect of reducing entitlement to a jobseekers payment. [35627/08]
View answerAs the Deputy will be aware, Ireland's social welfare system is based on two quite different types of entitlement — a social insurance system for people who have paid sufficient PRSI contributions and a social assistance system for people without adequate contributions who have little or no household means of their own.
Social insurance is intended both to enable people to insure themselves against adverse life events such as illness or unemployment and to provide for their state pensions and other benefits, through contributions to the national Social Insurance Fund. Social insurance benefits are not means-tested. Instead, entitlement depends on having paid the required number of PRSI contributions relevant to the particular benefit you wish to claim.
For the past eleven years, the Social Insurance Fund has been in surplus, with more than sufficient income to the fund to cover the payments being made from it each year, without the State having to provide a subsidy. However, that is changing. As a result of further increases in the live register, expenditure is expected to exceed income to the Fund by over €200 million this year and about €900 million next year. Although these current deficits can be met from the accumulated surplus, it looks likely that the Exchequer may yet again have to subsidize expenditure from the Social Insurance Fund within a few years.
In that context, it is appropriate to look at some of the instances where people with a very limited or distant contribution record have been able to qualify for very significant benefits, regardless of their household income. Currently, people who have paid just 52 contributions in total can qualify for Jobseekers Benefit, Illness Benefit and Health and Safety Benefit.
This means, for example, that migrants or young workers who have only worked here for a total of one year are entitled to claim job seekers payments for 12 months, without having to satisfy a means test. This will change from next January, when the number of required paid contributions will be doubled to 104 for new claimants. This change is expected to result in savings of €7m in 2009 and €12.8m in 2010 on the Jobseekers Benefit scheme.
A further anomaly that exists at present is that some people, who were previously working part-time, can receive a higher rate of payment from these schemes than what they were actually earning whilst at work. Again, this is considered to be inappropriate — a disincentive to employment — and so, and from next January, this situation will be addressed by increasing the earnings thresholds which currently apply to the reduced or graduated rates of payment from €150 to €300 per week. This change is expected to result in savings of €2.3m in 2009 and €3.4m in 2010 on the Jobseekers Benefit scheme.
At present, it is necessary to have made 13 paid contributions in the relevant tax year in order to qualify for Illness Benefit. However, `this condition does not exist for Jobseekers Benefit, with the result that people who may not have paid PRSI contributions in the past number of years can qualify. Again, it is considered that this position does not adequately reflect the contribution-based rationale for social insurance and so from next January, new claimants for Jobseekers Benefit will be required to satisfy the same conditions as those on Illness Benefit and must have paid 13 contributions in the relevant tax year. This change is expected to result in savings of €2.2m in 2009 and €5.3m in 2010 on the Jobseekers Benefit scheme.
The other two changes being made to Jobseekers Benefit relate to the duration of the payment. At present, people who have 260 or more paid social insurance contributions can receive Jobseekers Benefit for up to 15 months. As of today, this is being limited to 12 months for current claimants with less than six months duration on the scheme as well as all new claimants. This change is expected to result in savings of €37m in 2009 and €61m in 2010 on the Jobseekers Benefit scheme. Where the claimant has less than 260 paid contributions, the maximum duration of Jobseekers Benefit will be 9 months (instead of 12 months) if the claimant currently has been in receipt of benefit for less than three months and in respect of all new claimants. This change is expected to result in savings of €16m in 2009 and €25m in 2010 on the Jobseekers Benefit scheme.
In summary, new claimants for Jobseekers Benefit will in future have to have paid a total of at least 104 contributions to the Social Insurance Fund, with at least 13 of these paid in the relevant tax year. The rate of payment will more closely reflect what the individual was earning prior to becoming unemployed and the duration of the payment will be either 12 or 9 months depending on the number of social insurance contributions they have made in the past.
The savings referred to above will accrue to the Social Insurance Fund rather than directly to the Exchequer.
I would like to stress that people who will be affected by these changes will be able to claim Jobseekers Allowance or Supplementary Welfare Allowance instead, if they have limited means. The maximum rate of these two schemes is paid at the same rate as Jobseekers Benefit.
Question No. 135 answered with Question No. 116.