Dr. Fiona Dukelow:

I thank the Cathaoirleach and the committee for the invitation to speak. Means-testing is a very important element of the social welfare system and does not get enough attention. There is much that is unknown about it so the module being undertaken by the committee is very welcome. I have been working in this area, doing broad analysis of social protection policy in the Irish welfare state, for a number of years. My recent work has concentrated on lone parents and the social welfare system. With this background, I will make some broad points about means-testing trends and some points about gender in the system. I will end with some recommendations.

Means-testing attracts strong and diverse views. As a social policy instrument, what it is designed to do is open to different interpretations. As a mode of allocating social welfare, it is based on the principles of responding to financial need, targeting support to those who need it most and efficient use of scarce resources. Conversely, it risks becoming a residual system and a form of public charity detached from other social goals such as social inclusion and social cohesion. It is associated with higher levels of suspicion of welfare claimants and non-take-up of payments. It imposes a high administrative burden on claimants and is typically associated with higher rates of rejected applications. This erodes trust in the social welfare system. It is also administratively costly.

I will now move on to the Irish case in which we could say that all of these positive and negative points apply. As we all know, means-testing in the schemes in the Irish system is incredibly complex. As well as the administrative burden, it can, as all of our research attests, be a very undignified experience for claimants. The substantial role played by means-testing reveals the continued influence of the historical origins of our system and the characteristics of the liberal welfare model we shared with the UK. This, in turn, tied with designing payments around the male breadwinner. More recently, our system has been described as a hybrid model, combining the principles of means-testing and social insurance. Some very important changes have been implemented in recent years, and positive outcomes can be observed with respect to the risk of poverty. However, there are limits to these changes.

Despite gradually becoming a system that relies less on means-testing, there are limits to this depiction. In the European Union, we are still one of the outliers. We consistently have one of the higher proportion of expenditure going on means-tested payments. If we look specifically at the Department of Social Protection and the expenditure it is responsible for, we find an even higher proportion of means-tested benefit expenditure.

I have looked at some of the key trends over the ten years from 2013 to 2022. Overall we saw a decrease in means-tested expenditure, falling four percentage points from 58% to 54%. This means it still comprises over half of all expenditure. The main reason for the gradual decline is the clear trend in the decline in non-contributory State pension expenditure. This is positive in a sense. Conversely, if we look at the second-largest area of social expenditure, which is illness, disability and caring, the opposite trend is clearly occurring whereby a growing proportion of expenditure is means tested. This grew 11 percentage points between 2013 and 2022, from 57% to 68% of all expenditure in this area. The third largest area of expenditure, working age income supports, is always a bit more cyclical than the other areas. Over the ten years it fell by nine percentage points, from 80% to 71% of all expenditure in this area. Typically it is the highest area where we have means-tested payments.

I will now move on to gender. In addition to these uneven trends overall, and the implications they have for claimant experiences, risk of poverty and overall standard of living, there is a significant gender dimension to the likelihood of receiving either a contributory or means-tested payment. I will not go into the details and I have included more information in my submitted statement. Across all three areas, women are more likely than men to be found claiming means-tested payments. The reasons are very clear. It reflects their uneven participation in the labour market and the greater likelihood of engaging in caring or parenting roles. Women are also far more likely to feature in cases of derived rights to a payment or as a qualified adult. They may fail to access a payment because of household means-testing. This can be the case with regard to carer's allowance and jobseeker's allowance.

I will now move on to broad recommendations. These trends provide a rationale for several changes that would improve the role of means-testing in the system. In a sense, the recommendations I have to make are not new. They have been made in many reports over the years. They include greater individualisation of payments, which would have a direct impact on the experience of women as qualified adults in particular. This is a commitment in the Roadmap for Social Inclusion 2020-2025. Another important element which should go side by side with this is the financial independence or financial adequacy that individualisation would provide. A system of indexing primary and secondary payments is essential to ensure income adequacy and smooth out or eradicate anomalies between payments, especially around earnings disregards and savings disregards. Such indexation should also reflect the higher cost of living for low-income households. There are examples from other countries of this type of indexation.

More broadly again, the system could consider other forms of entitlement and reciprocity that moderate the role of means-testing. It is interesting to observe that in recent years entitlement to the contributory State pension has changed somewhat. There is much greater recognition of caring, with credited contributions for caring in at least three schemes. We could argue that this, in conjunction with other types of credits, edge more towards a universal type of system whereby the contributory principle is changing. Perhaps this recognition of care could be extended to build a care or participation ethic into the system, which would replace entitlement via financial need in some cases. Examples include recommendations for a participation income for carers and for other types of participation, including voluntary work of societal and environmental value. There is already a pilot. Perhaps it is quite different, but it is a pilot. This is the basic income for the arts, which is a form of participation income.

I will now move on to specific recommendations. Some anomalies regarding the means-testing of lone parent payments warrant attention especially. These reveal ways in which means-testing rules discourage work or create very complex anomalies for claimants. These include recognition of an earnings disregard for self-employed claimants of jobseeker's transitional payment. In the research I did with Dr. Whelan, we found that lone parents who are self-employed are so for the specific reason of having flexibility in their day and their timetable so they can work around their children's needs, especially with regard to school pick-up times. Not having self-employed income recognised is quite a hit for some people when they transition from the one-parent family payment to jobseeker's transitional payment.

The removal of maintenance payments for the means test is a significant reform due to come into effect on 1 May. This removal comes with complexities and anomalies. Maintenance, even if not paid, will still be assessed for secondary benefits such as housing payments and medical cards. In this sense anomalies continue despite reform, which reflects a lack of co-ordination between various Departments when it comes to means-testing. This is also quite important.