The family income supplement (FIS) is an in-work support which provides an income top-up for employees with children on low earnings. FIS is designed to prevent child and family poverty and to offer a financial incentive to take-up employment as compared to social welfare payments. Expenditure on FIS for 2014 is estimated to be of the order of €280 million and it is currently paid to some 44,000 families in respect of some 97,000 children.
A unique feature of FIS is that once the level of payment is determined, it continues to be payable at that rate for a period of 52 weeks, provided that the recipient remains in full-time employment, and regardless of whether there is a change in their financial circumstances, eg due to increase (or decrease) of earnings. The advantage of this feature is that recipients can be certain that they will receive a guaranteed level of income support throughout the 52 week period. This certainty is important to the success of the scheme as it provides a real incentive to workers with families to maximise their earnings opportunities. For those who experience a reduction in their earnings over the course of the year, the rate of payment will be reassessed at the end of the 52 weeks upon renewal of their FIS claim.
There are two changes in circumstances in which the FIS payment can be revised during the year:
- If a recipient starts to care for an additional child in the course of the 52 weeks.
- If a recipient is getting a one-parent family payment and the payment is stopped because their youngest child reached the relevant age limit.
The tax and social protection systems have an important part to play in creating jobs and reducing unemployment, which are the key challenges facing the Government. To this end, I established an Advisory Group on Tax and Social Welfare to harness expert opinion and experience on cost-effective proposals for improving employment incentives and poverty outcomes. The Group is currently examining working age supports, including FIS. I expect to receive the report of the Advisory Group in the coming months and look forward to considering its recommendations in relation to FIS and other in-work supports.