Ms Catherine Cox:

I thank the committee for the opportunity to speak today regarding the impact of means testing on carer's allowance. I am head of communications with Family Carers Ireland. I am joined by a family carer, Ms Moira Skelly, who will speak from her personal experience on this topic.

The State has reached a critical juncture in its treatment of family carers. While heavily defeated, the referendum on care earlier this year ignited a national conversation about crucial issues surrounding care and disability. It brought to light the many challenges faced by family carers and those receiving care and highlighted the need for a more ambitious, progressive and rights-based care system, which has resulted in an unequivocal wake-up call that the State can no longer be complacent in its obligation to support the hundreds of thousands of family carers to whom it is indebted due to the unpaid care they provide.

Why is reform of carer’s allowance needed? Despite improvements in recent years, the carer’s allowance means test remains one of the most contentious issues among family carers. Thousands of full-time family carers caring for people medically in need of full-time care do not qualify for carer’s allowance or receive a reduced amount of carer's allowance due to their modest household income. While carer’s allowance has served the needs of many carers for over three decades, we believe the scheme is now overly restrictive, gender-biased and no longer fit for purpose.

Why is that? First, it is outdated. It was introduced in the 1990s for people living with and caring for a relevant pensioner. It was never designed to meet the very different circumstances of carers who care for prolonged periods and need an income support that encourages, rather than restricts, their participation in work and education. Second, it undervalues care work. Carer’s allowance is the only social welfare payment where recipients are expected to work full time - more than 35 hours, many doing 24-7 - and, in return, they receive €16 more than the basic social welfare rate. Third, the payment itself is inadequate. Even before the cost-of-living crisis, households caring for a child with a profound disability faced additional weekly costs of up to €244, which is more than the maximum level of carer’s allowance. It is essential that a progressive welfare system keeps pace with inflation and ensures welfare rates are appropriately benchmarked to safeguard income adequacy, and that is not being done in this case. Fourth, the means test also forces carers to be financially dependent on their partner. Means testing based on household income leaves family carers - the majority of whom are women - who do not receive carer’s allowance financially reliant on their partner. Fifth, it also discourages employment. By imposing an 18.5-hour ceiling on work or study, this traps many family carers, forcing them to remain welfare-dependent and unable to prepare for life after care. Last, the taxation of carer’s allowance is unfair. Making carer’s allowance a taxable source of income when other comparable social welfare schemes are not taxed - like, for example, the jobseeker's allowance, disability allowance and the part-time jobs incentive scheme - is simply unfair. It imposes an undue penalty on family carers and reduces the monetary value of carer’s allowance.

Family Carers Ireland acknowledges the efforts made by the Minister, Deputy Humphreys, and her Department to increase the income and capital disregards for carer’s allowance in both budget 2022 and budget 2024, and the Minister's commitment to review the entire system of means testing for family carers. We believe fundamental change is urgently required and are calling for a transition from the outdated means tested carer’s allowance scheme towards a more equitable and gender-balanced family carer payment - what we would call a participation income - for full-time family carers that reflects the reality of contemporary caring relationships and families today, and that values and fairly compensates the immense contribution made by carers as well as our State’s reliance on them.

A participation income is a form of State income support that enables and values certain forms of unpaid work. It is similar to a universal basic income; however, the main difference is that individuals have to do something socially valuable in exchange for the money they receive. Care work is often referenced as one of the most deserving forms of unpaid work that would be well suited to a participation income. Both the National Economic and Social Council, NESC, and the Oireachtas Committee on Gender Equality recommend that consideration be given to a participation income for carers, and research undertaken with Maynooth University also supports this recommendation. Under this new scheme, other existing eligibility criteria attached to the carer’s allowance scheme could remain in force, which would mean that the scheme would not be open to potential abuse.

How much would it cost to abolish the means test for carer's allowance in the morning? In 2024, a Parliamentary Budget Office estimate ascribed a full-year 2024 cost of €375.3 million to abolish the carer’s allowance means test. Given that our family carers save our State €20 billion each year, we believe that is more than worth it. These estimates are considerably less than €1.2 billion that was suggested by the Department in 2022.

We believe now is the time to reassess the value we place on unpaid care and review how family carers are recognised and supported financially by the State. We believe this review must lead to fundamental changes in carer’s allowance, including the reclassification of the scheme, the abolition of the means test and the establishment of a participation income for family carers.

I will now hand over to Ms Moira Skelly, who will share her experience of the impact of means testing.