Social welfare programmes aim to be responsive to the needs of those who depend on income maintenance support while providing incentives to assist people to become more independent financially, particularly through employment.
A number of measures have been introduced in recent years to remove disincentives to taking up employment and to assist in the transition from welfare to work. These measures include special means disregards and tapered withdrawal of benefits as earnings increase and employment support schemes, such as the back to work programme. In addition, there are facilitators available in my Department's local offices around the country to assist unemployed people and lone parents with the transition to employment.
The income limit referred to by the Deputy applies to people who take up employment under approved employment schemes. Such people are entitled to retain certain social welfare and other benefits, known as secondary benefits, in total or in part, for the duration of the scheme subject to certain conditions.
For most people, the most significant secondary benefit is rent or mortgage interest supplement, which is paid under the supplementary welfare allowance scheme.
An income limit of €317.43 per week applies to these supplements. While this income limit has not changed since its introduction, significant other improvements have been made to the means test. Back to work allowance and family income supplement, in cases where one or both of these are in payment, are now disregarded in the assessment of the €317.43 weekly income limit. PRSI and reasonable travelling expenses are also disregarded in the means test.
In effect this means that people who had been unemployed and who commence employment with the support of the back to work allowance can have a weekly household income significantly in excess of the €317.43 limit in question and still qualify to retain 75% of their rent or mortgage interest supplement. For example, in the first year on the back to work allowance, a single person can have combined income from the back to work allowance and wages of €418.50 while a couple with two children can have an income of up to €510.75 a week. When the latest increases in social welfare rates become effective in January 2005, the levels of income in these cases will increase to €429 and €528.25 respectively.
Other improvements have also been made to the retention arrangements. The period for which rent or mortgage interest supplement may be retained has been extended to four years on a tapered basis — that is, 75% in year one, 50% in year two and 25% in years three and four. In addition, the maximum payment limit of €317.43 per month on the amount of supplement payable has been abolished for people on approved schemes.
As a consequence of these improvements, many families retain more of their rent or mortgage interest supplement than had been the case prior to these changes taking place. In addition, people availing of an employment support scheme may opt to be assessed under either standard supplementary welfare allowance rules or under the special retention rules and will be entitled to receive payment under whichever is the more favourable option for them. In that context, I was glad to be able to increase the income disregard in the standard rules of the scheme from €50 per week to €60 per week in this year's budget.
Overall, I consider that the current secondary benefit income eligibility thresholds and disregards, coupled with improvements in the standard rules of the supplementary welfare allowance scheme, ensure that people have a financial incentive to take up back to work opportunities. I will consider further improvements in the standard rules of the scheme in the context of future budgets.