Dáil Éireann Debate, Wednesday - 10 December 2014
43. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Social Protection the extent to which measures to alleviate poverty arising from budget 2015 continue to make positive impact; and if she will make a statement on the matter. [47331/14]
View answerOne of the key objectives of Budget 2015 was to assist unemployed families to return to work.
Through the new Back to Work Family Dividend scheme, long-term unemployed jobseekers with children who leave welfare to return to work can retain the child-related portion of their social welfare payment on a tapered basis over two years. This includes those who move to self-employment, such as the construction sector. It will also apply to One Parent Family Payment recipients who similarly go back into the workforce. The scheme will be worth €1,550 per child in the first year of employment or self-employment and half that amount again in the second year.
The Dividend will help increase the pace of the progress we are making in helping people back to work, thereby reducing poverty. It will help boost the recovery, reduce welfare expenditure in the long-run, and, most importantly, help the families in question to build a better financial future for themselves.
The Budget also provided for the expansion of JobsPlus to provide subsidies to employers to recruit and employ an additional 3,000 long-term unemployed jobseekers. This scheme has proven to be particularly successful with the longer-term unemployed (i.e. unemployed for more than two years.)
I was also pleased to be in the position to increase Child Benefit from €130 to €135 per month, which will benefit over 611,000 households with children. This will help all families with children but also has the additional benefit for unemployed families in that it is work neutral as it is retained in full when they return to the workforce.
I also announced, on Budget Day, a number of welfare initiatives which will benefit pensioners, carers and people with disabilities who are in receipt of a welfare payment. These initiatives included the re-introduction of a Christmas Bonus and an increase in the Living Alone Allowance.
The Christmas Bonus was abolished by the previous Government in 2009. I am pleased to say that I am in a position to partially restore the Bonus this year. A bonus of 25% was paid last week to long-term welfare recipients including all pensioners, people with disabilities, carers and long-term jobseekers. This will cost over €65 million and is in recognition of the position of vulnerable households.
There will be an increase in the living alone allowance of €1.30 per week from January, bringing the rate up from €7.70 to €9 for pensioners and people with disabilities. The living alone allowance is a payment made to pensioners and people with disabilities who live alone and was last increased in 1996.
As well as the measures mentioned above, all existing welfare payments and supports for pensioners will be maintained in 2015 – there will be no reductions.
Throughout the crisis, this Government protected core weekly welfare rates and maintained a massively strong social welfare safety net. That was a political choice which this Government made very deliberately; it is not one that was followed in other bailout countries. This is acknowledged by the ESRI, among others, which has pointed out that, unlike in other countries, income inequality has fallen in Ireland in recent years, largely because of the overall maintenance of the welfare system.
This is the first Budget where we have had the scope to make real positive improvement for welfare recipients. This is evidenced by the €65 million we are spending on the Bonus as well as €198 million of new welfare developments which I announced in the Budget and which will come into effect next year. It is hoped that with the continuing betterment of economic conditions, further resources will be freed up for future Budgets.
Social transfers play a crucial role in redistributing resources to those most in need. In 2012, social transfers (excluding pensions) reduced the at-risk-of poverty rate from 39 per cent to 16.5 per cent, thereby lifting one fifth of the Irish population out of income poverty.
Ireland is amongst the best performing EU countries in reducing poverty through social transfers (excluding pensions). Using comparable data from Eurostat from 2012, Ireland’s performance in reducing poverty at 60 per cent was far in excess of the EU-28 norm of 35 per cent.
Social impact assessment is an evidence-based methodology to estimate the likely distributive effects of policy proposals on poverty and social inequality, including the impact on family types, lifecycle groups and gender.
The Department published an integrated social impact assessments of Budgets 2013 and 2014 (using the ESRI SWITCH model) which included the main welfare and tax measures.
The Department is currently preparing a social impact assessment of the main welfare, tax and related measures for 2015. This will be finalised to take account of government decisions relating to water charges and affordability. It is intended to publish the analysis as soon as is feasible (when available). Furthermore, the Government has committed to carrying out a social impact assessment of the main taxation and welfare measures before the publishing of budgets by a cross-Department body led by the Departments of Finance, Social Protection and Public Expenditure and Reform.
