Dáil Éireann Debate, Tuesday - 4 July 2017
584. Deputy Willie O'Dea asked the Minister for Social Protection the estimated full-year cost of reducing the hours work to qualify for family income supplement from 19 to 15; and if she will make a statement on the matter. [30966/17]
View answerThe Family Income Supplement (FIS) is an in-work support which provides an income top-up for employees on low earnings with children. FIS is designed to prevent in-work poverty for low paid workers with child dependants and to offer a financial incentive to take-up employment. The estimated expenditure on FIS in 2017 is approximately €422 million and it is currently paid to almost 57,000 families in respect of some 126,000 children.
To qualify for FIS, a person must be engaged in full-time insurable employment which is expected to last for at least 3 months and be working for a minimum of 38 hours per fortnight or 19 hours per week. A couple may combine their hours of employment to meet the qualification criteria. The applicant must also have at least one qualified child who normally resides with them or is supported by them. Furthermore, the average family income must be below a specified amount which varies according to the number of qualified children in the family.
The “hours worked” eligibility criterion has been reduced significantly since the introduction of the scheme in 1984, from 30 hours per week to 19 hours per week in 1996. Further reducing the “hours worked” requirement would have potentially significant expenditure implications.
For low income workers with less than the minimum hours of employment for FIS and working on a casual basis up to and including 3 days per week, jobseeker’s schemes provide in-work income support through daily disregards and tapered withdrawal of payments.
The number of families who are working between 15-18 hours and are earning below the relevant FIS thresholds is currently unknown.
Reducing the numbers of hours worked required to access FIS from 19 to 15 could have a number of behavioural effects including:-
- reducing the incentive to increase part-time hours;
- resulting in recipients on the minimum 19 hours threshold reducing their hours of work; and
- a reduction in the “hours worked” criteria might attract new recipients currently on higher wages above the FIS threshold, who might decide to reduce their hours in order to qualify.
Under EU regulations FIS is defined as a family benefit and is exportable in cases where the claimant is working in Ireland but where the children are living abroad. My Department has no way of predicting with any degree of accuracy the potential in-flow from this category.
For all of the reasons above my Department has no way of accurately estimating the cost of reducing the numbers of hours worked required to access FIS from 19 to 15 hours.
Reducing the “hours worked” requirement would have implications for existing working age schemes. Under jobseeker's benefit and jobseeker's allowance a person may, subject to scheme criteria, work for up to three days and continue to receive support under the schemes.
Lowering the “hours worked” threshold could also create the risk that FIS would end up inadvertently subsidising unsustainably low earnings and contributing to an increase in the levels of precarious employment.
