The phased OFP scheme age change reforms were introduced in the Social Welfare and Pensions Act, 2012. The purpose of these reforms is to reduce long-term social welfare dependency by providing lone parents with the necessary education, training and employment supports to develop their skills set and, ultimately, to secure employment and financial independence.
The reforms have been ongoing since 2013 and the final phase of the OFP scheme age change reforms will be taking place on 2 July, 2015 when the youngest child for receipt of OFP will reduce to 7 years of age for all customers.
For customers who are working less than 19 hours per week and who are affected by the OFP scheme age change reforms, the most financially advantageous option that is available is to increase their working hours to a minimum of 19 per week, or to 38 per fortnight, and to subsequently apply for the family income supplement (FIS). The additional hours worked can come from one employer or from a combination of employers.
FIS recipients can also claim the recently introduced back to work family dividend (BTWFD). This income support allows these customers to retain the increase for qualified child (IQC) portion of their former OFP payment, which equals €29.80 per week per child (up to a maximum of €119.20 per week for four children), for two years, with full IQC entitlement (worth €1,550) in the first year and 50% entitlement (worth €775) in the second year.
While it is not possible to anticipate the numbers of transitioning OFP recipients who will be unable to increase their working hours to avail of the FIS supplement, there has been a significant increase in new FIS applications from lone parents since the OFP scheme age change reforms commenced in July, 2013. This indicates that many transitioning lone parents who are working less than 19 hours are increasing their hours of employment in order to become new FIS customers.
Customers who cannot increase their working hours in order to claim the FIS supplement have access to the jobseeker’s transitional payment until their youngest child reaches the age of 14 years. This arrangement allows these customers to work part-time without restriction and to simultaneously receive an income support payment, subject to a means test. If their youngest child is aged 14 years or over, they may still qualify for the jobseeker’s allowance (JA).
In addition, the Labour Market Council has established a sub-group that will specifically examine the issue of how employers nationwide can assist transitioning OFP customers with increasing their hours of work in order to enable them to qualify for FIS and, subsequently, the BTWFD. This sub-group will also look at ways in which employers can assist with the promotion of the BTWFD.
