Family income supplement is the principal in-work income support for people in low-income employment. It is designed to provide an incentive to people with children, to remain in, or take up, employment rather than be fully welfare dependent. To qualify for payment, family income must be below the threshold applicable to the family size, which varies according to the number of qualified child dependants.
The number of families who are eligible for FIS is not directly comparable with income statistics compiled by the Revenue Commissioners for a number of reasons. Revenue data does not, generally speaking, take into account the number of hours worked, the number of children in a family, nor social welfare income which might not be taxed but would be taken into account for FIS. Also, the information held by the Revenue Commissioners is out of date, generally by at least a year and does not take into account all the current circumstances that a person may find themselves in.
The issue of paying FIS through the tax system was considered by a group set up under the Programme for Prosperity and Fairness and chaired by the Department of Finance. The Group concluded that FIS should continue to be paid through the social welfare system.
On the question of FIS take up, my department is undertaking a project which it hopes to complete in mid 2008, to provide an indication of current take up levels. The project will also include an analysis of the reasons and factors why persons who appear to have an entitlement to FIS have not taken up their entitlement or availed of this employment support; to identify what barriers, in terms of access to eligibility, may exist; where such barriers exist how they can be mitigated or removed; to assess whether alternative mechanisms to enhance take up of FIS can be implemented; and ultimately to improve customer service and access to family income supplement eligibility for low income families.
Given the radical developments in the economy and labour force in recent years, and in view of the changed FIS landscape, no conclusive judgement can be made regarding current FIS take-up levels until this issue has been comprehensively re-examined. In this context it should be noted that, since the end of 2004, FIS claim volume has increased by almost 50% and expenditure by over 90%.