Dr. Aed?n Doris:

We made the point that there would have to be a systematic approach to means testing if the living wage was introduced, given that it could have all kinds of perverse consequences. Someone has since pointed out to me that a somewhat similar situation applies to the new childcare payment, in that the thresholds are such that, by increasing wages, someone can lose so much that it outweighs the benefits.

The commission raised this issue and stated that there needed to be more co-ordination with the Department of Social Protection when benefits were being introduced by other Departments. The Department of Social Protection has an understanding of the question of incentives. There is also a cliff edge with PRSI, of course, so it is not that everything was perfect previously.

HAP was a fairly minor issue until relatively recently. The problem has gone from the odd unlucky person falling into this trap to something much more general. This issue needs to be considered seriously.