Dáil Éireann - Volume 481 - 15 October, 1997
Written Answers - Social Welfare Benefits.
Mr. McGrath Mr. McGrath
10. Mr. McGrath asked the Minister for Social, Community and Family Affairs the rates of payment to benefit recipients for child dependants; and the reason different rates apply to different schemes irrespective of the status of the child. [16412/97]
Minister for Social, Community and Family Affairs (Mr. D. Ahern) Dermot Ahern
Minister for Social, Community and Family Affairs (Mr. D. Ahern): The maximum rates of payment for child dependants are set out in a tabular statement which I will make available to the Deputy. There are currently three different rates of child dependant allowances payable to social welfare recipients. The reasons for this are largely historical. The Commission on Social Welfare recommended that the rates be rationalised. Significant progress has been made over the years — there were thirty six different rates payable in 1987; now there are only three. further rationalisation would be extremely costly. The additional annual cost of paying all child dependant allowances at the highest rate currently paid is estimated to be in the region of £58 million.
It is widely recognised that the loss of child dependant allowances by social welfare recipients on taking up employment can act as a disincentive to taking up available work opportunities. This issue has been highlighted in various reports, notably the final report of the expert working group on integrating tax and social welfare.
Policy direction in relation to child income support in recent years has, therefore, focused on targeting resources towards the provision of substantial increases in child benefit. This approach, which centres on making child income support more neutral vis-a-vis the employment status of the parent, has the effect of reducing work disincentives.
Child benefit remains one of the most effective means of tackling poverty, as it channels resources directly to families. It is of particular importance to families on low incomes and because it is not withdrawn when an unemployed parent takes up employment and is not assessed as means for other secondary benefits such as differential rents, medical cards, etc, it does not act as a disincentive to taking up employment.
I should also mention, in the context of reducing disincentives to work, that priority has been given to utilising family income supplement (FIS) as a means of increasing the net return from work to families with children. Accordingly, in line with a commitment made in the Partnership 2000 Agreement, FIS will be reformed so as to be calculated  on a net income basis, rather than on gross wages, as at present. This will significantly increase the supplements payable under the scheme, thereby increasing the rewards from work. Since June of this year, FIS is calculated on the basis of gross earnings less any PRSI contributions, levies and pension contributions payable.
Table 1 — Maximum rates of Child Dependant Allowances
Dáil Éireann 481 Written Answers Social Welfare Benefits.