Regulations provide for the tapered withdrawal of the qualified adult allowance for claimants – QAA – of certain welfare payments, including unemployment assistance, where the spouse or partner of the claimant is earning between £70 and £135 per week.
In the case of unemployment assistance, the position is that where weekly gross earnings are between £70 and £90, the QAA is reduced by £2.50 for each additional £5 earned; between £90 and £135, the QAA is reduced by £3.50 for every £5 of earnings.
In addition, for the purpose of means-tested social assistance payments, including unemployment assistance, account is taken of the spouse's net earnings, that is, earnings net of income tax, PRSI, health insurance contributions, superannuation and union dues. Currently, an income disregard of £70, inclusive of travel costs, applies where such employment exceeds three days per week.
I share the Deputy's concern that the withdrawal of the QAA combined with the assessment of the spouse's earnings in the case of recipients of social assistance payments, can result in poverty traps. Indeed, it was in order to alleviate such effects that I increased the spouse income disregard from £45 to £70 per week and substantially improved the tapering arrangements in the 2000 budget. The revised arrangements substantially improve the situation, to the extent that poverty traps now only persist over small ranges of income, marginally above the income thresholds where different rates apply.
I will continue to explore the potential for addressing such traps where they arise. However, any further measures of this nature would have to take account of factors such as equity vis-à-vis other categories of people who combine work with receipt of a partial social welfare payment and avoid any disincentives to the claimant to take up employment.