Dáil Éireann Debate, Wednesday - 26 July 2017
1585. Deputy Willie O'Dea asked the Minister for Social Protection if her Department has considered the impact that the recommendation to increase the national minimum wage will have on income thresholds set to qualify for certain social welfare payments; her plans to increase the income thresholds for social welfare payments in line with the recommendations for same; and if she will make a statement on the matter. [36594/17]
Amharc ar fhreagraI welcome the recent recommendation by the Low Pay Commission to increase the hourly rate of the Minimum Wage with effect from January 2018. The report of the Commission does not make any mention or recommendations in relation to means tested social welfare entitlements.
The Department operates a range of means tested social assistance schemes where, in order to qualify for the payment, the claimant must satisfy a means test which takes into account the assets and income (including earnings) of the claimant and his or her spouse/partner.
The means test for earnings includes tapering arrangements, whereby a certain proportion of earnings are disregarded in order to provide a financial incentive to work. For instance, for jobseeker’s allowance recipients, the first €20 of daily earnings is disregarded (subject to a maximum of 3 days per week) and 60% of the remainder is assessed as means. Similarly, for one-parent family allowance and jobseeker’s transition recipients, the first €110 of earnings is disregarded and 50% of the remainder is assessed as means. It should be noted that the level of disregards apply equally to those who receive hourly earnings in excess of the minimum wage.
Increases in the minimum wage result in an overall financial gain for means-tested social welfare recipients who are working and on the minimum wage. In addition, means tested social welfare recipients, including recipients who are working, benefitted from the increase of €5 per week in the maximum weekly rates of payment announced in Budget 2017. These increases came into effect last March and included proportionate increases for those claiming an increase for a qualified adult.
Any changes to the earnings disregards or the income thresholds of social welfare schemes would have cost implications and would have to be considered in the overall policy and budgetary context.
