Michael Ferris
Ceist:33 Mr. Ferris asked the Minister for Social, Community and Family Affairs his views on the merits of introducing a basic income scheme as outlined by the Conference of Religious in Ireland. [16494/97]
Written Answers - Basic Income Scheme.
Trevor Sargent
Ceist:41 Mr. Sargent asked the Minister for Social, Community and Family Affairs the ways in which his Department values the work of raising families or caring for an infirm relative by a parent or other relatives who foregoes paid employment; and whether he will consider the phased implementation of the guaranteed basic income payment as a way of recognising the value of work in the home. [16512/97]
I propose to take Questions Nos. 33 and 41 together.
My Department provides support for people providing care to relatives in a number of ways, as follows.
Firstly, there is the carer's allowance. This is a social assistance scheme which provides an income maintenance payment to people who are providing elderly or incapacitated pensioners or certain disabled persons with full-time care and attention and whose incomes fall below certain limits. Last June, two improvements in the scheme were introduced: an additional payment, or 50 per cent of the basic rate, was introduced for carers who take care of more than one person, and the "full time care" requirement was relaxed to extend entitlement to cases where the person being cared for attended a day-care centre on a limited basis.
The Government programme, An Action Programme for the Millennium, contains a commitment to improve the carer's allowance, and I will be examining how best to make progress on this in the context of the budget.
The second way in which my Department recognises people working in the home is through the ‘homemakers' disregards'. From 6 April 1994, time spent working full-time in the home rearing young children up to six years of age or caring for an incapacitated person may be disregarded for the purpose of calculating the yearly average condition in determining entitlement to contributory old age pension. This was increased to include children up to 12 years effective from April 1995. Altogether, a maximum of 20 years may be disregarded for this purpose. The main aim is to assist people taking time out of work but there is a certain amount of flexibility to enable people to engage in part-time work with earnings of up to £30 per week. Up to 250,000 people, mainly women, may benefit from this arrangement.
Turning now to the question of basic income, the Conference of Religious of Ireland has for some time advocated the introduction of a basic income scheme in this country. Under such a scheme, the social welfare system, as we know it, would be abolished; personal income tax allowances and exemptions would also be abolished. Instead, every person in the country would be entitled, as of right, to a weekly basic income payment from the State. This would be paid without any means test, and regardless of family circumstances or labour force status. The idea of basic income is not a new one; many such schemes have been discussed in the past, both here in Ireland and abroad. Most of the interest in basic income has centred around the contribution it might make to removing poverty traps from the tax and social welfare systems. It is true that such a scheme would provide an automatic payment, without any means test, to people working fulltime in the home. However, since the payment would be payable to everyone, whether they work in the home, work in the paid economy or choose not to work at all, it is questionable if the payment could be seen as "recognising the value of work in the home".
A particular problem with basic income is that most of the research which has been undertaken to date in Ireland has suggested that the tax rates needed to fund such a scheme would be extremely high. More recent research by CORI has suggested that the growth in the economy in recent years, and the consequent growth in the tax base, means that the tax rates need to fund the basic income scheme may be lower than previously envisaged. Partnership 2000 contains a commitment to carry out a further independent appraisal of the concept and the full implications of introducing a basic income payment. A broadly-based steering group for this project has been established under the chairmanship of the Department of the Taoiseach. The Government is also committed to producing a Green Paper on the issue of basic income within two years. The research being commissioned by the steering group will be an important input into that paper.
When these studies are complete, the Government will be in a better position to evaluate the merits and disadvantages of introducing a basic income scheme and I will consider what action needs to be taken at that stage.