Dáil Éireann - Volume 378 - 01 March, 1988
Written Answers. - Family Income Supplement.
Mr. S. Barrett Mr. S. Barrett
28. Mr. S. Barrett asked the Minister for Social Welfare if he has any plans to amend the provisions of the family income supplement especially in relation to extending provisions pro rata beyond  the fifth child; and if he will make a statement on the matter.
Mrs. Doyle Mrs. Doyle
34. Mrs. Doyle asked the Minister for Social Welfare if he has any plans to make changes in the family income supplement especially in relation to larger families.
Mr. Kenny Mr. Kenny
52. Mr. Kenny asked the Minister for Social Welfare if he will give details of any studies in his Department giving comparitive figures for net disposal income as between (a) an employed married man with six, seven or eight children including where eligible, family income supplement and (b) an unemployed married man on unemployment assistance with six, seven or eight children including where eligible general medical service card and differential rent reduction; and whether he has any plans to adjust the family income supplement to remove any anomalies.
Mr. J. Mitchell Mr. J. Mitchell
53. Mr. J. Mitchell asked the Minister for Social Welfare if, in relation to family income supplement he will remove the limit of five children and allow in respect of the sixth and subsequent children the same earnings and allowances per child as applies to each of the first five children; if he will give an estimate of the cost of such a change in a complete year; if he will give details of the way in which the costing is arrived at; if, in respect of family income supplement especially in view of the fact that a married man with a large family has the same tax-free allowance as a marrried man with no family, he will take into account only net income i.e. income less PAYE or PRSI when considering earnings in respect of the family income supplement rather than gross income as at present; if he will give an estimate of the cost of such a change; if he will give details of the way in which the costing is arrived at; and if he will make a statement on the matter.
Minister for Social Welfare (Dr. Woods) Michael J. Woods
Minister for Social Welfare (Dr. Woods): I propose to take Questions Nos. 28, 34, 52 and 53 together.
The family income supplement which was introduced in September 1984, is  designed to lessen the disincentive to work caused by the narrow gap which can arise between low take-home pay and social welfare benefits.
Total expenditure on family income supplement was £4.4 million in 1987 and the Estimates provision for this year is £5.3 million.
The income limits for family income supplement are calculated in such a way as to meet this objective. This calculation is based on the current rates of unemployment benefit and supplementary welfare allowance which are grossed up to take account of taxation and social insurance liabilities. Therefore, the structure of the scheme at present is such that gross earnings, as distinct from net are used. It is not possible to estimate the cost of using net income for establishing entitlement to family income supplement, as this data is not available for claimants.
When the scheme was originally designed, it was decided that the payment should be limited to five children so as to ensure that the scheme would not be supplementing incomes in excess of average earnings. The payment of additional allowances in respect of the sixth and subsequent children would imply a major change to the structure of the scheme. The cost of the proposal is estimated at £250,000 in a full year.
While my Department reviews the relationship between benefit levels and earnings no specific studies of the type raised by Deputy Kenny have been carried out recently. The Deputy will probably be aware that the whole issue of incentive effects in the Irish context was examined in detail in a background paper prepared for the Commission on Social Welfare and this paper contains references to other relevant studies.
One of the commitments in the Programme for National Recovery was that a detailed study of the workings of the family income supplement scheme would be carried out in order to identify what adjustments might be necessary. This review is currently being undertaken and I consider it best to await the report  before making any fundamental changes to the scheme. When considering the report, I will, of course, bear in mind the issues raised by the Deputies in their questions.
Dáil Éireann 378 Written Answers. Family Income Supplement.