Dr. Claire Keane:

Sure. A piece of work we did years ago that I found really interesting was looking at people's cash incentives to work. I think it was close to 95% of people who were better off not working were in employment. People intrinsically want to work, even if they might be financially better off if they did not. While our headline tax and social welfare system has been keeping pace with wage inflation, income limits for things like SUSI grants, medical cards and childcare subsidies were introduced and remain frozen. Recent work we did showed that the income medical limits for a medical card have not changed since 2005, despite 45% growth in wages. There is a rule in the system that if all of your income is from social welfare, you get a medical card. You could have two families on the same income and only one qualifies, even though they are on the same income, because one is purely in receipt of social welfare.

There is a fear of people in receipt of social welfare to take up employment because those income limits are not changing. The situation with student grants is very similar. While wages have been growing, the income limits for the grants means people at the very lower end get them but people at the lower to middle end are not getting those entitlements. Overall, we do not have formal indexation, which is increases in line with inflation. We have informal indexation for the social welfare system and it has been keeping pace with price growth and wage growth but we do not see that with additional benefits such as housing supports, medical cards and student grants.

It is really important that those income limits do not get forgotten about. It is the same with childcare subsidies. There is more support for those on lower incomes. We have been rolling out increases in the universal payments to people but we are not increasing those income limits for those in line with wage growth. It is important to look at the system as a whole and that those means-tested elements keep pace with price growth so that people are not having them taken away.