Tuesday, 9 October 2018

Questions (482)

Clare Daly

Question:

482. Deputy Clare Daly asked the Minister for Employment Affairs and Social Protection the financial savings made in each of the years 2015 to 2017 as a direct result of the introduction of changes to the eligibility and income thresholds for the one-parent family payments introduced in 2015; and the estimated saving for 2018. [40795/18]

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Written answers (Question to Employment)

The OFP scheme has played an important role in providing income support to lone parents since its introduction in 1997. However, in the past, this income support for lone parents was passive in nature, and involved limited engagement by the State employment services with OFP recipients.

Research has shown that being at work reduces the at-risk-of-poverty rate for lone parents by three-quarters, compared to those who do not work. This highlights that the best way to tackle poverty among lone parents is to assist them into employment. Access to activation supports is vital to achieve this objective and it is therefore imperative that my Department continues to engage with lone parents to assist them into employment.

The non-conditionality nature of the OFP payment, which was unique in Europe, coupled with its very long duration, has, over time, contributed to long-term social welfare dependency, and associated poverty, among many lone parents and their children. The reforms to the OFP scheme were introduced to address this issue. The reforms provide enhanced access to the Department’s Intreo service to lone parents once their youngest child turns 7 years of age. Access to the Department’s range of education and employment support services is essential to facilitate lone parents to progress into sustainable employment and financial independence.

The policy reforms implemented I believe, are in the best interests of both lone parents and their children, and of our aims to reduce child poverty.

The following table reflects the number of recipients and the expenditure on One-Parent Family Payment (OFP) from 2015 to 2017.

Year

No. of recipients on the scheme (year-end)

Weekly Personal Rate

Weekly Dependant Child Rate

Weekly Income Disregard

Expenditure on the scheme €m

2015

41,468

€188.00

€29.80

€90

€670.0

2016

40,317

€188.00

€29.80

€90

€500.7

2017

39,310

€193.00

€29.80

€110

€502.0

My Department will be spending an estimated €502 million on the OFP scheme in 2018. The OFP scheme currently supports over 39,000 recipients and almost 73,000 children.

The Department’s level of expenditure on OFP is directly related to the number of claimants on the scheme (and the number of child dependants), so as the OFP numbers reduced due the reforms, the OFP expenditure reduced as well. However, many of those exiting the OFP scheme transferred to other social welfare schemes, such as Jobseeker’s Transitional payment, Jobseeker’s Allowance, Working Family Payment or Back to Work Family Dividend, so the expenditure on these schemes increased.

It is worth pointing out that the decreases in the income disregard for OFP that occurred from 2012 to 2014 were unrelated to the reforms of the OFP scheme, and were due to budgetary considerations. The lower income disregards meant that more of the earned income was taken into consideration as means, thereby impacting the overall income received by OFP recipients engaged in employment. The Government has been incrementally increasing the income disregard for OFP since Budget 2017, and it is currently set at €130. I will of course consider further increases in the context of the forthcoming Budget.