John Paul O'Shea (Cork North-West, Fine Gael)
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I will read a note on privilege and housekeeping matters before we begin. Witnesses and members are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as make him, her or it identifiable or otherwise engage in speech that would be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction that I might make.

Members attending remotely are reminded of the constitutional requirement that to participate in public meetings they must be physically present within the confines of the Leinster House complex. This is due to the constitutional requirement that to participate in public meetings members must be physically present within the confines or place where the Parliament has chosen to sit. In this regard, I ask members attending via Microsoft Teams to confirm they are on the grounds of the Leinster House complex if they wish to contribute to the meeting.

I remind all those in attendance to ensure their mobile phones are switched off or put on silent mode.

Today's meeting concerns a commitment from the programme for Government to explore the potential for a new working age payment and a targeted child benefit payment. The matter is directly related to the recent launch and public consultation by the Department of Social Protection and the publication of associated discussion documents. I understand the public consultation is open until 12 June and welcomes views from all.

With that in mind, I welcome the following officials to this morning's meeting: from the Department of Social Protection; Mr. Niall Egan, assistant secretary; Ms Karen Kennedy, principal officer; and Mr. Conchubhair Mac Lochlainn, assistant principal. They are all very welcome here this morning.

I now invite Mr. Egan to make his opening remarks.

Mr. Niall Egan:

I am the assistant secretary general in the Department of Social Protection, with responsibility for the public consultation on the potential new working age and targeted child payments. As the Chair said, I am joined by my colleagues, Ms. Karen Kennedy, who is the principal officer with responsibility for one parent and child income policy and jobseeker’s policy in the Department, and Mr. Conchubhair Mac Lochlainn, assistant principal in the area of child income policy.

In the Programme for Government: Securing Ireland’s Future there are commitments to explore a targeted child payment and to introduce a working age payment. The Minister for Social Protection, Deputy Dara Calleary, has recently taken an important step in delivering on these commitments through the publication of a discussion document as part of a public consultation. As the name implies, the discussion document is intended to support discussion and gather feedback from the public and stakeholders. It is not intended to provide a concrete plan for changes but, rather, seeks to help people consider the issues, determine whether change is needed and respond with their own ideas of what changes, if any, should be made. The discussion document explains the current social welfare system and sets out the arguments for and against the introduction of a targeted child payment and a working age payment. It includes questions designed to prompt consideration of the topics presented.

In the first instance, it is important to acknowledge the strength of our current social welfare system. By international standards, the Irish system is among the most effective within the European Union at mitigating poverty. The CSO’s survey on income and living conditions shows that the at risk of poverty rate would be substantially higher in the absence of social transfers, highlighting the redistributive role of the Irish social welfare system. However, our social welfare system has evolved over many decades and the policy decisions that informed our current payments reflect the society in which they were introduced. It is therefore equally important that we periodically examine our current payments to ensure they reflect modern society and are as effective as possible in reducing poverty. The discussion document introduces ideas for two possible new payments. Each payment is intended to address known limitations of the current welfare system. The ideas proposed are not the only way to address these limitations but, rather, one possible path forward.

With regard to the potential targeted child payment, the main supports for low-income families with children are the working family payment and the child support payment. While these supports are effective at alleviating poverty, each payment has specific rules which can result in some low-income families being ineligible. Conversely, there can be situations where families may be eligible for both payments. In these situations, it can be difficult for families to determine which payment would provide more support, as their entitlement under each scheme changes depending on household income, work patterns and the age of their children. As a result, families with similar incomes may receive very different levels of support from the current system.

The targeted child payment described in the discussion document aims to support more consistent treatment of families by replacing the working family payment and child support payment with a single stand-alone targeted child payment. This payment would be open to families with children who are currently not receiving a social welfare payment, and eligibility would be based on family income. For those who are unemployed or partially employed, jobseeker’s allowance is our main means-tested income support. While it works well, cliff-edge rules, such as the requirement to be unemployed four days out of seven, can discourage people from taking on additional work or penalise them when they do. The four out of seven rule is rooted in labour market assumptions of a five-day 9-to-5 Monday to Friday working week. It does not reflect modern working patterns with part-time, variable work and multiple income streams. In addition, jobseeker’s allowance income disregards are based on days worked, which can result in two people with the same weekly income receiving different payments, purely due to how their hours of work are distributed.

The working age payment seeks to modernise income support, retaining protection against poverty while ensuring that work always pays. The discussion document presents one option for what a new working age payment could look like. Again, this is not a final design, nor is it the only possible option for a working age payment. The description of the payment in the discussion document is deliberately high level, but it is intended to elicit ideas. With that in mind, I look forward to the discussion today on this important public consultation, particularly in hearing the views of the members of this committee. My colleagues and I are happy to answer any questions the committee may have this morning.

John Paul O'Shea (Cork North-West, Fine Gael)
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I thank Mr. Egan. I remind members attending remotely to use the raise the hand feature and cancel it once they have spoken.

I call Deputy Guirke.

Johnny Guirke (Meath West, Sinn Fein)
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I thank the witnesses for coming in today. Could they elaborate on the specific limitations of the current working family payment and child support payment that the proposed targeted child payment aims to address? How will the eligibility criteria for a targeted child payment be determined, and what do the witnesses see the means test being? What measures will be in place to ensure that families who need support the most will receive it? Regarding the impact on existing payments, what will happen to families currently receiving the working family payment and child support payment if the new targeted child payment is introduced? Will they have to transition to the new payment?

Mr. Niall Egan:

I thank Deputy Guirke for that.

Not everyone is eligible for the working family payment. There is a threshold of 19 hours, so if you are not working 19 hours per week or 38 hours a fortnight, you are not eligible for the working family payment. Conversely, if you are on jobseeker's allowance and you are working for more than three days a week, you are not eligible for this payment if you work a fourth or fifth day. There is a potential gap between those two, depending on the number of hours an individual or family works. For instance, if you were working 18 hours but spread over five days, you would not qualify under the current system for either jobseeker's allowance or the working family payment. The number of people in that category is likely to be relatively small, but that gap does exist and is one of the issues we are trying to address with the working age payment proposal. We are trying to bridge that gap so that there is a continuation of support, irrespective of the number of hours the person is working, up to a certain income threshold.

The Deputy asked what that income threshold and means assessment would be. That is to be determined. As part of the public consultation, we are very much looking for people's views, and one of the issues we are looking for is what that threshold point should be. Similar to our other schemes, such as the one-parent family payment, disability allowance and carer's allowance, we have income thresholds that are tapered. We are thinking of a similar approach for the working age payment. What that taper will be and where those income thresholds will be is to be determined. As I said, that is what the public consultation is for. We are looking to elicit views to confirm that.

Regarding the Deputy's question on the child support payment, there have been significant increases in recent budgets, particularly in the last budget which was the largest ever increase in child support payments for over-12s, going up by €16 per week for each child, up to €78. If the child is under 12 years of age, it is at €58. However, that payment is only paid where you are in receipt of a primary social protection payment, such as jobseeker's allowance, disability allowance or the one-parent family payment. A person's eligibility to continue to receive that payment depends on their eligibility to continue to receive the primary payment, in this case, jobseeker's allowance. That goes back to the issue of working five days and 18 hours, in which case the person would not be eligible for jobseeker's allowance. That means not only do they lose jobseeker's allowance, they also lose the child support payment component. which, for a family with a child over 12 years of age, is €78 per week. That is a significant component.

By trying to fix and address that gap under the working age payment, we are trying to streamline and provide a gradual taper without cliff edges between the current system that exists.

Johnny Guirke (Meath West, Sinn Fein)
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How will the effectiveness of the new targeted child payment and working age payment be evaluated once implemented? What metrics will be used to assess their impact on poverty reduction?

Giving the evolving nature of work and family structures, how does the Department plan to periodically review and update these payments to ensure they remain relevant and effective?

Mr. Niall Egan:

One of the key metrics that the Department will be looking at will be the take-up level. We know from a lot of research that has been undertaken since the working family payment was launched in 1984 that the take-up level has been a very significant issue over the entire period of the payment.

One issue we will look at under a new payment after its introduction is whether we have addressed and improved take-up levels. Based on research in different reports from the ESRI, take-up levels are typically between a third to 50%. We would like to see an improvement in the take-up levels by low-income families.

The working family payment is very effective for those families who avail of it. Over the past few years, we have spent a lot of time promoting and communicating it, and we have seen an increase. We are up to about 56,000 recipients at present, so that has increased. Under the new scheme, we would like to see that rise again because we know from the ESRI research that there are additional low-income families who should avail of it. That is one measure we will be looking at.

In terms of the other metrics and the poverty implications, we have the simulating welfare, income tax, childcare and health, SWITCH, model at our disposal and we work with the ESRI on this. This helps us assess the poverty impacts of proposed measures, so we will utilise that in advance of any final design.

We will also be measuring poverty levels for specific cohorts using the CSO's survey on income and living conditions and measuring what changes have happened since the introduction of new payments.

The Department also has a long history of undertaking econometric analysis of our schemes. I would imagine that after a period of time, probably at least two years or once we get the data, we will undertake a detailed econometric review of any new payments introduced to fully assess their impacts. That will then inform potential other changes that may be required pending the outcome of such research.

Johnny Guirke (Meath West, Sinn Fein)
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What are the main reasons families do not avail of these payments?

Mr. Niall Egan:

I will ask my colleague Ms Kennedy to come in on that point.

Ms Karen Kennedy:

It is very challenging to pinpoint one reason for that. There is an element of stigma. Research indicates that some working families do not want to be seen receiving social welfare supports. While not making it fully universal, part of the proposal is considering whether having a wider stand-alone targeted child payment could help reduce it or make it more commonplace to increase the uptake.

Another reason is awareness. The Department regularly runs information campaigns on the working family payment, and we have seen a steady increase in the number of families taking it up year on year, so it does seem to be working. However, as my colleague said, it continues to be lower than what we would like. We want to make sure that any family who are struggling and are eligible for supports avail of them.

William Aird (Laois, Fine Gael)
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I apologise for being a little bit delayed. Public transport let me down. If the current system is affected by EU standards but families on similar incomes can receive very different levels of support, does it point to a basic fairness problem in the existing model?

Mr. Niall Egan:

It does, indeed. The Deputy is right. As we outlined in the discussion document, if one family are on jobseeker's allowance and work 20 hours over three days, they can get a €60 disregard and a tapered reduction to their jobseeker's allowance, depending on their income from employment. However, if another family work 20 hours over five days, they are not entitled to jobseeker's allowance. Depending on the income, they may be entitled to the working family payment. If it is less than the working family payment threshold, say 15 hours, they are not entitled to anything.

There is a fundamental fairness issue but, to complicate things even further, if one family are working and receive €150 a week over five days, they are not entitled to jobseeker's allowance. If they receive that €150 over three days, they are. Again, if they receive €150 for one day of work, they will receive less than if they had done it over three days. It is complex and we are very aware of that. We have seen people struggle to make informed decisions about which payment to avail of because their hours of work may change week on week. Should they be on the working family payment? Should they be on jobseeker's allowance? This can change week on week depending on their hours of work. I agree with the Deputy's synopsis.

William Aird (Laois, Fine Gael)
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Can the Department quantify how many people are discouraged from taking up extra hours or irregular work because of the four days out of seven rule given that the proposed working age payment is intended to ensure that work always pays?

Mr. Niall Egan:

To be honest, it is very hard to know the answer to that question. We know that cliff edge or disincentive exists in the system and people are rational. People who are offered employment on the fourth day will turn around to their employer and say they cannot take it because they could lose their jobseeker's allowance. On that basis, we do not have full visibility in relation to that issue. It is also very difficult for the Department to have access to the number of hours an individual on our payments works. We do not collect that information unless they are on the working family payment, and then it is only that they satisfy the minimum hour threshold.

It is very difficult for the Department to assess that, but we know that the gaps exist and those gaps are dictating individual behaviour.

William Aird (Laois, Fine Gael)
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What safeguards is the Department considering to ensure that no low-income family or jobseeker would lose income during the transition to a new targeted child payment or working age payment?

Mr. Niall Egan:

That is our objective, and the Minister has been very clear about that. He does not wish to see any existing customers lose. How we manage that situation will depend entirely on the final design, but we are working actively with colleagues in the CSO to get the best possible data available that the system has to identify potential cohorts that may be at risk. We will then look at how a final design impacts on those and look at measures that could ameliorate that risk.

I might ask my colleague Ms Kennedy to come in on the Deputy's question on fairness.

Ms Karen Kennedy:

I thank the Deputy for his questions, and I will elaborate a little bit on what my colleague has said. With regard to fairness, it is important to note that each scheme has arisen organically with a particular targeted cohort in mind. So, while when we look across schemes, we may ask why a group is treated in such a way, our social welfare system is always aimed at providing tailored supports to people. These policies are introduced with a particular rationale. The working family payment policy was introduced with a 19-hour threshold because there is evidence that working less than 16 hours does not bring someone out of poverty.

There is a rationale behind each of the policy decisions but, as our system evolves organically and because of how different payments have evolved over time with good rationale, it is important that we periodically take stock to see where there end up being people who fall between the cracks and whether there is an opportunity to bring them together and make sure that the Department equalise any unfairness or mistreatment.

So, there was a rationale at the time, and this is about taking stock and looking at whether there is a better way for the future.

William Aird (Laois, Fine Gael)
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The Department says that these reforms are designed to ensure that work always pays, but has it modelled whether some low- and middle-income working families could lose supports when the working family and child support payments are merged into a single scheme?

Mr. Niall Egan:

The Department is in the process of modelling that but, again, it depends on the final design. We are very conscious that the Minister said that he does not wish to see any losses, but we are talking about 56,000 working family payment recipients and roughly 20,000 casual workers who are in receipt of part-time jobseeker's allowance. There are an awful lot of scenarios that we have to plan for and map, but we are carefully looking at identifying potential customers who could be at risk.

As I said, that is not the aim of the policy. The aim of the policy is to mitigate that if we encounter it.

William Aird (Laois, Fine Gael)
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The Department proposes to replace job seeker's allowance with a broader working-age payment regardless of work status. How will it ensure that this does not weaken incentives for people to take up full-time employment or increase long-term welfare dependency?

Mr. Niall Egan:

That is our primary aim. Irrespective of the changes we make, we have a consistent policy that we want to support people to transition from welfare supports into employment, and that means sustainable full-time employment. That will remain our primary objective in terms of the supports. Currently, the vast majority of people make that transition. However, we are very conscious that we do not want to lose that goal. We will have to keep that in mind in the context of any measures we introduce. We will continue to support casual job seekers with employment supports should they require additional help in terms of making the transition to full employment. We absolutely do not want to see an increase in welfare dependency over the long term - that is not in anyone’s interests - on foot of these policies or the Department’s policy across the board.

William Aird (Laois, Fine Gael)
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This reform could reshape income supports for working families and unemployed people, so why has the Department launched the consultation before publishing costings or poverty impact assessments?

Mr. Niall Egan:

The purpose of the consultation is to get people’s genuine views. We want to hear from people who are in receipt of these payments to say what works and, more importantly, what has been a difficulty for them in terms of accessing support. We are conscious that there are gaps and issues as my colleague, Ms Kennedy, has alluded to. The scheme design was well intended. We first enabled people on jobseeker’s allowance to work part-time back in 1990. That is a long time ago. We introduced the working family payment, the family income support payment, in 1984. We have made changes to both schemes since then, but, as my colleague said, now is time to take stock. The consultation is how we are putting out concepts to ask for people’s views, to get the views of this committee and other representatives in the Oireachtas, community and voluntary groups that actively work and engage on behalf of the people in receipt of our payments and also employers and people in receipt of these schemes. We want to hear these views. These views will generally inform the final design. The final design will then be assessed from a policy perspective, a cost perspective and a poverty perspective in terms of whether it is achieving what we seek to achieve. When we have our final design, we will undertake the analysis that the Deputy asked for.

William Aird (Laois, Fine Gael)
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That is grand. Can Mr. Egan guarantee that no currently eligible family or job seekers will receive less support under these new payment models? He may have answered that already and said he would guarantee that they would not.

Mr. Niall Egan:

I do not think I used the word guarantee. It is our intention to avoid that situation, but it honestly does depend on the final design. Our Minister has been very strong in terms of what he wishes to see. I just cannot give the Deputy a 100% guarantee at the moment. It is not our intention. We have to undertake the detailed analysis before we get to that point. If we identify cohorts, however, we will do our utmost to try to mitigate any potential issues over the course of the design.

William Aird (Laois, Fine Gael)
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Does Mr. Egan agree that is very important?

Mr. Niall Egan:

I do, yes.

William Aird (Laois, Fine Gael)
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In fairness.

Mr. Niall Egan:

There are so many people with so many variables and things change week to week. We are fully committed to that intention. As I said, our Minister is very strong on this point. I want to undertake the detailed analysis first and come back to the Deputy with a full response to that question if that is okay.

William Aird (Laois, Fine Gael)
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By replacing several targeted supports with a broader single payment, is there a risk regarding supports for vulnerable groups such as lone parents, larger families or people in insecure work?

Mr. Niall Egan:

As we say in the discussion document, we will have to consider some of those secondary supports in terms of the final design. One of the obvious ones is the fuel allowance. There is also a back-to-work family dividend scheme for people in transition that we think we may no longer need. The support will continue for longer as people are in work, but, again, that depends on circumstances. Fuel allowance is an issue in terms of how we continue to pay that for some cohorts and at what point we no longer pay it. That is an issue we will be actively considering. We are very aware of the point the Deputy raised. Again, it depends on the final design, but we are very conscious of that. Those secondary supports are there for a reason. They are there to support those who are more vulnerable. They are targeted measures that will continue to have a role to play.

William Aird (Laois, Fine Gael)
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The working age payment is designed to remove cliff edges and encourage employment. What evidence does the Department have that the current welfare rules are a major barrier to work rather than issues like childcare costs, housing pressures or low pay?

Mr. Niall Egan:

This issue is incredibly complex. All those other issues the Deputy has identified are under active consideration as to whether an individual or a member of a family can take up a job in a given location at a particular point. To be clear, I am not saying that the cliff edges and the gaps are the issues we have identified within the social welfare system are often the primary drivers for people not taking up work. From the evidence that has emerged from research we and other organisations have undertaken, we know that the vast majority of people in receipt of our schemes take up work and transition to employment. We are very confident and strong on that. However, if a family cannot access childcare that is a huge issue for a lone-parent family or family with young children to take up full-time work. If they do not have access to transport, getting to employment is a huge issue. If they do not have housing in near proximity to their employment, that again is a huge issue and an additional expense. All those are relevant variables and factors.

What we do know is within the existing remit of the social welfare system, no two families in receipt of job seeker’s allowance, receiving, say, €150 a week, depending on the number of days, can get different levels of income based under our current structure. It goes back to the Deputy’s point on fairness and equity. Is that right? This is one issue we are looking to potentially address. Then there is the potential gap between the support that is available under jobseeker’s allowance versus working family payment. Again, is that right? It is not intended but it is there. This is a chance to reconsider the existing schemes that have been in place for several decades at this point.

William Aird (Laois, Fine Gael)
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Grand. I have three more questions. Does the Chair want me to continue?

John Paul O'Shea (Cork North-West, Fine Gael)
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One more. We can come back to the other two.

William Aird (Laois, Fine Gael)
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I do not mind either.

John Paul O'Shea (Cork North-West, Fine Gael)
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That is fine. We will move on in that case. I thank Mr. Egan for coming in. It is good to see the programme for Government commitment being pursued. We are a year and a half into the term of this Government. It is good to see that the Minister and the Department have moved to have this consultation and investigate the potential of amalgamating the working family payment and child support payment. Mr. Egan mentioned that there are 56,000 people on the working family payment. How many are currently receiving the child support payment? Do we know?

Mr. Niall Egan:

There are almost 333,000 children in receipt of a child support payment, so there would be fewer primary recipients obviously. There are multiple children. I do not have the figure to hand in relation to how many primary recipients are availing of it, but we are supporting, through that payment, nearly 333,000 children.

John Paul O'Shea (Cork North-West, Fine Gael)
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Deputy Guirke and Deputy Aird raised this. The intentionality of the Department is for people not to lose any financial supports from this and it is just to catch people who might be missing out with either-or payment at the moment. Do we know how many people are getting both payments?

Ms Karen Kennedy:

Typically, the child support payment is paid with a primary payment and then the working family payment is separate. Typically you can either receive one or the other. The two exceptions are the one-parent family payment. It is possible to receive both working family payment and one-parent family payment. There is approximately just over 6,000 lone-parents who are availing of that. The other exception is disability allowance. I think my colleagues have the information somewhere. Again, there is a small number - I think it is less than 1,000 - who are also receiving it.

Typically, they are the exceptions where you get both but predominantly, for the rest of the system people either receive the child support payment or the working family payment. To go back to Deputy Aird's point, there are so many different circumstances and families. It is possible, within a family, that one person can be in receipt of a jobseeker's allowance and the other person can be in receipt of the working family payment. There are layers of complexity to that. There can also be situations with half-rate child support payments but as a whole, as a concept, people would typically receive one or the other and then there are the exceptions.

John Paul O'Shea (Cork North-West, Fine Gael)
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On the targeted child payment it says that it will be open to children who are not currently in receipt of any social payment. Is that correct?

Ms Karen Kennedy:

Yes, that is the fundamental purpose. It goes back to my colleague's point that at the moment, the child support payment is linked to a primary payment. In order to receive it, a person has to first meet the rules of that primary payment, be it being unemployed four days out of seven or being a lone parent. If a person does not meet those rules, he or she does not get the support. Similarly, on the working family payment, a person needs to meet the rules regarding working 38 hours per fortnight. If a person does not meet those they do not qualify. The idea of this is to have a payment that is based purely on income. It is not linked to meeting other criteria. It looks at the household income and that is the primary determinant for whether a person gets support or not. It is bringing a more equal treatment and untying the payment from other criteria. This idea of recognising that a family with children on a low income needs supports is in place in some other countries across Europe as well.

John Paul O'Shea (Cork North-West, Fine Gael)
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The intention is to have a tapered rate of payment for families, with those on the lowest incomes receiving the highest payments and that will gradually reduce as people's income increases. Do we have an indication of the type of payment or the maximum payment? Are those yet to be decided?

Ms Karen Kennedy:

The detailed design will need to be decided. It will be informed by the design of the consultation, which will in turn, set the rates. As a starting principle, we have to look at what we have in place, which is the child support payment and the working family payment. We have elements we know work really well with regards to the child support payment, in particular, having a higher rate for over-12s than under-12s. This is backed up by research that it is a very positive policy and we would wish to retain that. Our proposal would be that we would retain that disaggregated rate and so effectively, we would be almost setting up a stand-alone child support payment. Again, since we do not want people losing out, we would assume that the rate would be no less than our existing child support payments.

John Paul O'Shea (Cork North-West, Fine Gael)
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So that is a combination of the working family payment and the child support payment. Is that correct?

Ms Karen Kennedy:

It is more like an amalgamation. Recognising that the working family payment does not disaggregate, we would be bringing in that benefit to those who would be migrating across. Again, with regard to specifics, we really need to look at the exact design but we will be looking at trying to make sure that there is a taper, with the maximum rate aligned to what people are currently getting and that the taper would be such that people would not be experiencing a sudden loss of support.

John Paul O'Shea (Cork North-West, Fine Gael)
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It is important to point out that this does not impact the standard child benefit payment. It is totally separate. That really needs to get out there into the public domain. The intention is to try to get feedback from people who are currently receiving these payments. Is that correct?

Mr. Niall Egan:

That is correct.

John Paul O'Shea (Cork North-West, Fine Gael)
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Consultation has been open since 5 May. How many submissions have been received to date?

Mr. Niall Egan:

We have had 80 submissions to date.

John Paul O'Shea (Cork North-West, Fine Gael)
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It is open until 12 June. Is that correct?

Mr. Niall Egan:

Yes.

John Paul O'Shea (Cork North-West, Fine Gael)
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Regarding the working age payment, obviously it is available to everybody, single people, couples and families, regardless of their work status. There is a set threshold here as well. What do the witnesses think of this set threshold? Will it be on the basis of the jobseeker's allowance threshold again?

Mr. Niall Egan:

This is to be determined but as my colleague, Ms Kennedy, has said in relation to the child payment, it is going to operate within a similar level of thresholds for supports we currently have. Again, we will be looking at it in the context of what is available via either the jobseeker's allowance or the working family payment. It will be within a range of roughly what is available and what a typical family receives on foot of the measures we currently have.

John Paul O'Shea (Cork North-West, Fine Gael)
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The intention is to reduce it gradually as people come back more into employment. I am very interested in the four days out of seven and the anomaly there. How many people are affected by that at the moment?

Mr. Niall Egan:

It is very difficult to be definitive about that because as I said previously, people make rational decisions. We would not see visibility where an individual was offered employment on a fourth or a fifth day.

John Paul O'Shea (Cork North-West, Fine Gael)
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For people currently on jobseeker's allowance no survey has been done in terms of asking people their reasons for staying on that. Is that correct?

Mr. Niall Egan:

We know that the vast majority of people who are working casually, as we call it, and are receiving a partial jobseeker's allowance payment, work three days. We think about 58% are working three days, about 33% are working two days and 12% are working one day. People are being rational about this. They get €20 for each day they work, so it makes sense if people can get employment for three days. We intend to do a piece of work on how many people fall out of payment week to week. It is possible that people could be offered employment for four and five days and would receive a jobseeker's payment that week. We have not undertaken this analysis yet but we will look at it. That will give us a sense if there is any pattern within the current population of jobseekers who are working part time, but the numbers are small. What we do not know, for example, is if someone is offered it and are not availing of it.

Ms Karen Kennedy:

To clarify with regard to that, for someone who is working casually a requirement of the jobseeker's allowance is that they are genuinely seeking full-time work. If a person was offered a fourth day of work they would be required to take it. It would be challenging to get accurate information in that regard.

John Paul O'Shea (Cork North-West, Fine Gael)
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That finishes my contribution. Senator Sarah O'Reilly is next.

Sarah O'Reilly (Aontú)
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I thank the witnesses for coming in today. I am a bit all over the place. I have notes written everywhere so I ask the witnesses to bear with me. The additional support of the newborn baby grant for children born or adopted is very welcome. Regarding the increases to the child support payment, they are always very welcome but sometimes there are unexpected knock-on effects. I am sorry for being late to the meeting and maybe the witnesses covered this earlier. Thresholds concern me a bit because once a person goes over those thresholds, particularly if someone is receiving increased supports, it may have an knock-on effect on fuel allowance, the medical card or a person's eligibility for the housing assistance payment, HAP. Is the Department working with the HSE and local authorities to ensure these knock-on effects do not happen? Most of the people on these payments are very vulnerable and can be very exposed. Something positive could have an unintended consequence.

Regarding the back to school clothing and footwear allowance, has consideration been given to extending this to foster families? I have asked about-----

John Paul O'Shea (Cork North-West, Fine Gael)
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This morning's discussion is on the amalgamation of these payments. The back to school clothing and footwear allowance is not up for discussion.

Sarah O'Reilly (Aontú)
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It is in the briefing paper.

John Paul O'Shea (Cork North-West, Fine Gael)
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Yes, but this morning's questions are in relation to the proposed new payment, so please keep it to that. If we were to bring in every social welfare payment we would be here all day.

Sarah O'Reilly (Aontú)
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Okay. The household income is a concern for me. There are more and more scenarios of three or four generations of people living under the same roof. I have raised on numerous occasions the lack of support for self-employed people, particularly if they become ill or on a lower income. They provide much needed employment across the State and yet sometimes they find themselves struggling for help when they need it.

Self-employed individuals cannot currently avail of the working family payment unless they are in another form of employment. Would this change with the targeted child supports if they were below the income threshold?

Mr. Niall Egan:

I thank the Senator. I completely agree with her comments in relation to the newborn baby grant. For her information, we have paid approximately 50,000 newborn baby grants to date since this came in.

In relation to the issue of thresholds, it is complex. We are very aware of the impact. It is currently an issue across all schemes. As I said earlier in response to Deputy Aird's questions, I am very conscious that whatever final design we land on, particularly with targeted supplementary measures that the Department delivers, such as the fuel allowance, we need to be very conscious of how a final design will impact that. It is not our intention to replace one cliff edge with another. We intend to look at that.

On the Senator's wider cross-government point, it is an issue. At this point, we have not had detailed conversations with colleagues in the Departments of Health or housing because we need a design. We have reached out to our colleagues in those Departments. We have obviously made them aware of the public consultation but the final design, in terms of our provisional designs, we will have to discuss with them. Be aware that this is a difficult issue. It currently exists with supports across the board. I might ask my colleague to add to that in a few minutes.

I agree regarding household income. That is how we assess our income supports. If there are multiple generations in receipt of a household payment, we take into account a partner's income. If they have children over 25, we do not take into account their income in relation to the parents. Sorry, they are not a child any more. What I mean is the child of the parents. I am making a hames of this, so my apologies. That child is treated separately. If they are under 25, parental income can impact an individual living with their parents. That is an issue we are looking at.

In terms of a lack of support for the self-employed, the Senator is right about the working family payment. They cannot access the working family payment based solely on self-employed income - they require additional income from employment - but they can avail of jobseeker's allowance or jobseeker's benefit for the self-employed. That support is available.

On the final design and the role, we are very open in regard to the discussion document. We have to give consideration for the self-employed in any future final design. It is difficult. Our access to information in relation to the self-employed is a lot less than it is for employees. We have good information through Revenue's systems on individuals who are employed but we do not have the same visibility of regular information. One of the things we want is to use the most accurate and up-to-date earnings information on employment to accurately reflect an individual's entitlement.

Sarah O'Reilly (Aontú)
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Has the Department done any modelling on the outcomes and how this will affect child poverty?

Mr. Niall Egan:

We have not yet, but that is because we are at the initial stages of this.

Sarah O'Reilly (Aontú)
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I know.

Mr. Niall Egan:

From a public consultation perspective, we generally want to hear people's views and identify issues to make sure we are fully aware of the issues people face. Then, a final design will have to go through an assessment. We have available to us what we call the SWITCH model, which is from the ESRI. It will help us to assess. We do this for all budget measures on the eve of the budget to assess which measures are going to impact poverty and income levels. We fully intend, before any final design is implemented, to undertake that analysis.

Pat Gallagher (Donegal, Fianna Fail)
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The Chair might have ruled me out of order for the last question about the universal child benefit for under-16s or up to the age of 19 if you are in education. I come from Donegal, where we have a lot of our people travelling to the UK. If someone's income is from the UK, it is my understanding that the child benefit is not available to them. We should be proud to say that a lot of our social welfare rates are normally much higher than the comparative ones in the UK, but is the Department considering making the difference between the UK and Irish ones available to them?

Mr. Niall Egan:

In the context of this proposal, we are not making any proposed changes to universal child benefit at all. The "as is" situation the Deputy has outlined there would continue. It will not be impacted by the potential new payments we are discussing here.

Pat Gallagher (Donegal, Fianna Fail)
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It might be something that we raise at a later stage, when there is a differentiation. There are people who come home to Donegal and if they are in receipt of a UK pension, Mr. Egan's Department makes up the difference if they qualify after a means test. I thought the same might apply, but that is for another day. I thank Mr. Egan for the response.

Mr. Niall Egan:

I am happy to discuss it again. On the pensions, the difference there is that it is a means-tested scheme. We obviously want to ensure that pensioners, depending on their income, are topped up by a State non-contributory pension, as the Deputy is aware. With child benefit, because it is not means tested, it is one of our most accessible schemes but as the Deputy pointed out, it depends on circumstances. It is not means tested and that is really the differential between the two scenarios.

Pat Gallagher (Donegal, Fianna Fail)
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We might not like the replies but we have to accept the facts. I thank Mr. Egan.

Mark Wall (Kildare South, Labour)
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I thank everyone for coming in this morning. It is a very interesting debate. I was listening in. In regard to my first question, it was mentioned that 56,000 people were in receipt of the working family payment but that an ESRI study indicated that there were additional people who were not in receipt of it. The Department is doing its best do attract those people. Do we have any idea of how many people there are outside of the 56,000 currently in receipt of the pension? The Department said that it was trying to do its very best to attract those people in. What does that actually entail? I know advertising was mentioned and trying to promote it but where can we, as public representatives, see how the Department is trying to attract people to that payment? That is my first question.

Mr. Niall Egan:

I thank the Deputy. Dr. Karina Doorley of the ESRI was the primary author of a paper. The last paper I saw estimated that take-up was around 53%, which would imply - if you apply that same percentage to 56,000 - that there should be a similar number not availing of it. This is genuinely very difficult to get a handle on. On that range, previous research going back maybe 15 years has said that it could be as low as a third. There has been significant take-up in the interim but we know there are low-income families not availing of it. That is generally due to a lack of awareness, we believe, and the stigma potentially associated with it.

Previously, under the working family payment, an individual would have to go to their employer and get a form signed off. Members are probably very familiar with this in their roles as representatives. There was a stigma in going to your employer if you were an individual saying you needed a top-up from the State for work. Working with a lot of the community and voluntary groups - the Irish National Organisation of the Unemployed, INOU, One Family or the Society of St. Vincent de Paul - consistently gave us feedback in relation to that. We amended our processes a couple of years ago and removed that process. If individuals apply now, whether it be online or on paper, we ask for a payslip and their P60. They do not have to go directly to their employer, so that has had a positive impact in regard to take-up. The other measure we have taken, the online application process, has been very beneficial because a lot of people, particularly this cohort, expect our services to be available online. They are not exclusively so. That has helped but we have also undertaken extensive communication campaigns promoting the working family payment. One thing we have noticed that really gets through are any measures or announcements as part of the budget packages, and the increases. They are carried by the national media and are everywhere for the next few days.

That also helps. Being frank, any help representatives within the Oireachtas, in terms of promoting it at their clinics or with their constituents, which I know they do regularly, would help. It is one of those scenarios where people might be vaguely aware of a lot of our supports but not sure whether they are eligible until a given point when their circumstances change. Maybe they are not eligible, then they have an additional child and they just think they are still not eligible. It also goes back to the fact that what we are trying to address and put into the discussion document is that our schemes can be complex depending on your circumstances, and if you fall between them, you could be better off on jobseeker's allowance than on the working family payment, but that could switch in a relatively short time.

Mark Wall (Kildare South, Labour)
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The whole thing for me is that it is a bit shocking that we are talking about 56,000 people who potentially could avail of the working family payment but who are not on it at the moment. I do not think the stigma is there. For a lot of people I deal with, when they come to my office, and I am sure it is the same for everyone else, they are looking for help. The message needs to go out today that there is help there, that the Department is providing the working family payment and that there are potentially 56,000 families who could avail of it but are not doing so. I think we can get over that stigma very quickly when people see, given the cost-of-living crisis that we all know is there at the moment, that there is actually help there. That is an important message for the committee to put out this morning. I thank the witnesses for that.

I have one other question and it is about the Xs and Os, the casual labour, the four-day rule and making work pay. When people come into my office, the first thing they say to me is that they will lose their secondary benefits. This was mentioned earlier. The medical card is a huge part of that. I am not sure if the Department has come across that or reached out to the medical card section about how we actually incorporate that into this payment. It is a huge safety blanket for so many people, and the fact that they could potentially lose it by taking that additional day's work does mean that a lot of people actually do not go ahead with it. These are the kinds of messages we get through our offices. Is the Department aware of that? Fuel allowance was also mentioned earlier. That is obviously huge as well. What is the Department going to do to ensure that those secondary benefits are maintained in order that those who can and should be working and need to work, given the crisis we are in at the moment, actually are working?

Mr. Niall Egan:

We are very much aware of those measures. I am showing my age here, but there was a report done by the ESRI in which Tim Callan and Michael Savage - both have subsequently left - pointed out that people make these decisions about the medical card being the primary issue, whether they can retain it, when taking up employment. I stress that the evidence shows that the vast majority of people will make the decision to take up employment. I just want to be clear about that. We are aware of this. Measures have been introduced about people retaining the medical card. In addition, in the most recent budget there was fuel allowance for people with disabilities, for instance. If they progress into employment, they can retain fuel allowance for a period. We are very much aware of these issues. As part of our detailed analysis on the provisional designs we will look at, secondary benefits will have to feature largely.

Mark Wall (Kildare South, Labour)
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It is a huge conversation that as a committee we need to have as well because it is a huge issue for anybody looking to go that additional day or take up additional employment.

The final question I have for the witnesses is about the under-25s and how they fit into this new payment. Their payment at the moment is €160, roughly, a week. What plans does the Department have for under-25s, or has it looked at that cohort of people and how we can encourage them? Is that payment likely to increase, or how do we encourage that cohort to get the work where work might be available to them?

Mr. Niall Egan:

Just to be clear, under-25s can access the full payment if they engage in education, training or employment supports, so there is a strong incentive for the under-25s. The last thing we in the Department want to see or I think anyone wants to see is people maintaining for a very long period in receipt of a jobseeker's allowance payment. As regards the new working-age payment, as to what we are planning and proposing, it will be available to single couples, lone parents, so it will be available for a wider cohort, including the under-25s. Obviously, their role and their rate have yet to be determined in relation to it, so I cannot give the Deputy a definitive answer as to what the design will be, but it is an issue we are aware of. We are also aware that giving individuals who are under 25 access to the higher rate if they engage in a measure that gets them closer to the labour market is in their interest and our interest and has helped them progress into employment, which is obviously the best outcome for everyone.

Mark Wall (Kildare South, Labour)
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Absolutely.

John Paul O'Shea (Cork North-West, Fine Gael)
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Moving on now to the next speaker, I call Deputy Catherine Ardagh.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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I thank the witnesses for coming in. This is obviously a really important and interesting debate. It is really important not just for workers but also for small companies that are hiring people who are working on this three-day week. The economy is doing quite well, and companies like to offer people more hours. When they turn them down on the basis that they are afraid they are going to lose not just, as we said, some of the working family payment supports but also secondary benefits, it is becoming a crisis. I am really glad that we are going to see this consultation process. I think it will be hard. It has to be done on a cross-departmental basis because we have housing and the Department of Health, and the fuel allowance is within the witnesses' Department. The secondary benefits and the weekly income are a huge part of it. My preference would be a tapering off, whereby maybe for every extra €20 earned, your payment is reduced by only €3 or some sort of matrix. Has the Department done research on this? Has it studied variants as to how this could work that the witnesses could share with us?

Mr. Niall Egan:

To be honest, we have not got to that level of detail at this point. Our focus has been pulling together a discussion document, looking at what the issues are and trying to explain them to people in a way that people understand, and I think the discussion document does that. It lays out obviously that we are not hiding and that there are potential issues here that people face regularly, but we will undertake that analysis following the public consultation and any designs or provisional designs and, obviously, before our final design. It is tricky because there is no right answer here either. The existing system supports a significant number of people. I take Deputy Wall's point that take-up levels need to be improved, but we do know the existing system is one of the most effective ways of mitigating in-work poverty. We have one of the lower in-work poverty rates within the EU. That is largely due to jobseeker's allowance and working family payment, but it is not perfect.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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In relation to the 56,000 people who are entitled to this but are not taking it up, when you are applying for a social welfare benefit, it will be backdated usually to the date on which you applied for it. Is there any way of enticing people - for instance, backdating their payments by maybe six months - to give them a bit of a cherry to apply? Really, it is not the people who will benefit but the families. This is a child poverty measure, ultimately. If we know that there are 56,000 people out there who should be in receipt of this payment and their families should be benefiting from it and are not, we really need to bring them along. Perhaps there could be some sort of incentive to do so. It might be backdated to six months before the date on which you applied, or some extra incentive. It is the children who are missing out. That is the idea of this type of payment. It is a measure to tackle child poverty. That was the reason it was introduced in the first place.

Mr. Niall Egan:

Our issue here will be that our schemes, the schemes we are talking about today, are legislative schemes. We have to ensure that people meet the eligibility requirements. I think it may be difficult for us to go back beyond the date of application because we do not know whether they are eligible. We will think about it, but my initial reaction is, from a legislative scheme perspective, we are a little tied-----

Catherine Ardagh (Dublin South Central, Fianna Fail)
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I understand. I am just trying to figure out a way in which we could try to encourage people to-----

Mr. Niall Egan:

It is a valid point. We do not know definitively that there are 56,000 people not eligible for the working family payment. That is research from the ESRI a couple of years ago. We do know they exist; we just do not know the quantum.

Part of the issue is that we are trying to look at whether our schemes are fit for purpose, given modern working patterns. They were designed 30 or 40 years ago. There were designed when people predominantly worked Monday to Friday, nine to five. That does not always reflect patterns for people now. They might have other responsibilities or part-time work at a given moment in their life may be more attractive. Also, as Ms Kennedy said, each scheme was designed independently for a particular purpose. They have been very successful in that but now is an opportunity to take a step back and reflect on the schemes in 2026 and how they interact with and support each other. There have been multiple changes since their introduction in the mid 1980s and early 1990s. Is the current structure appropriate?

Catherine Ardagh (Dublin South Central, Fianna Fail)
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No.

Mr. Niall Egan:

That is what we are trying to get at. I will ask my colleague to come in briefly.

Ms Karen Kennedy:

On point regarding the 56,000 people and the uptake, we need to be careful. It is very challenging to definitively say how many it is. The original paper from the ESRI looked at two different approaches to quantifying it and ended up with two different numbers. When defining somebody who was missing out, the paper looked at anybody who would have been better off on the working family payment. We tried to highlight in the discussion document how complicated the decisions are for families and how they can change as a child ages. The paper also included people who were on another payment but would have been better off. This is where secondary benefits come in. This year, there has been an increase in the working family payment as well as the budget decision to bring the fuel allowance into that payment. We have seen that people who technically had a higher rate on the working family payment but who may have lost their fuel allowance have been opting to sit on a lower primary payment. These are the choices.

Part of the issue we are trying to draw attention to in our discussion paper is that customers should have the best support they are eligible for without having to do intensive calculations and research. Our feedback from stakeholders is that some of the most adept at research and calculations are our customers because they are the ones with skin in the game. Part of the public consultation is an opportunity to hear from the people who know the intricacies.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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How will the Department be doing the public consultation? Will it carried out in libraries? Face to face is really important, even if it is outside shops. It is like we do the census where you are asking people directly. I find online surveys are really hit-and-miss.

Ms Karen Kennedy:

There is a website and we have a media campaign to make people aware of the consultation. People can submit their own personal consultations via email or post, or they can request to call somebody. We have received about 80 personal consultations to date. We will also be hosting an in-person event, which we are making people aware of, for the public and stakeholders. We will be joined by colleagues from other Departments at that. That will take place on 2 June. We have offered to do online sessions if there is interest in them.

John Paul O'Shea (Cork North-West, Fine Gael)
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Where is that in-person event?

Ms Karen Kennedy:

It will take place in the Revenue offices, an lár on O'Connell Street.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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Will we be invited?

John Paul O'Shea (Cork North-West, Fine Gael)
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Yes.

Eoin Hayes (Dublin Bay South, Social Democrats)
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I thank the witnesses for coming in and preparing for this. It is an important area and one everybody cares about. I welcome this discussion. I thank them also for all the work they do on the working family and child support payments. They were right to point out in their briefing document that the transfer system in Ireland is extremely effective. In the OECD more generally and the European Union, pre-market inequality is not great. It is corrected very much by the work the witnesses and their Department do. I sincerely thank them for that.

I think we all agree child poverty is a scourge. There are significant long-term effects for the individual and society. We have to do all we can. Just the other day I was in a school not far from here where 85% of students came from social housing or IPAS backgrounds and 70% of them came from lone-parent families. In the south inner city in particular, there is real deprivation. The question of child poverty is significant in my constituency, as well as across the country and in lots of places outside the south inner city.

By any measure, we are a high-income country. We are fairly well-off in global terms. The following is not directed at the witnesses so much as at the Government. It is worth pointing out the Parliamentary Budget Office, PBO, said poverty would increase because of budget 2026. We can compare and contrast different parties' approaches to different things. The programme for Government wants to bring consistent poverty down to 3%; by the end of the term of this Government, we in the Social Democrats wanted to bring it down to 0% if we were in government. The child poverty measures brought in in budget 2026 cost about €330 million, if I am not mistaken. The alternative budgets from my party and other parties were double that. The second tier of child benefit was one of the ideas we put forward, though I know it may not be the perfect idea.

I am by no means a social protection or social policy expert. I am fairly new to this portfolio in general. One question I have been really struggling with is what it takes to bring child poverty down very significantly. I understand completely we cannot do it in one go. It will not happen in one year or one budget. What is the quantum needed to bring it to zero or near zero, if we are serious about if from a budgetary perspective? Part of that is targeting. Do the witnesses have a sense of what those quantums would look like?

I echo some other points made: the cliffs, the income disregards, the means testing, the eligibility for different schemes, whether fuel allowance or medical cards. I totally agree with all that has been said. There are very real issues in the social protection system, particularly for people transitioning from low-income or poverty situations into work. I echo the question in the briefing paper about the gradual reductions. That is really worthwhile and an important shift in how we think about these payments. One of the questions is about the thresholds and the rate at which the declines happen. They should be very gradual. That would help alleviate some of these effects. I know there is a stimulative impact to that economically but for lower income households it is worthwhile.

I echo the point about modern work patterns but have a question. Beyond modern work patterns, there are certain complications for lower income households, whether disabilities or somebody who is a carer. There are other complicating factors that have become part of modern life. It would be interesting to hear from the witnesses on that. When they think about these populations, what does that diversity tend to look like? Those are all my questions. Thank you.

John Paul O'Shea (Cork North-West, Fine Gael)
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Your seven minutes are nearly up and you have no answers got.

Eoin Hayes (Dublin Bay South, Social Democrats)
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Sorry.

John Paul O'Shea (Cork North-West, Fine Gael)
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Maybe the officials can give a quick response.

Mr. Niall Egan:

I thank the Deputy. On child poverty, the Government target relates to consistent poverty. As the Deputy stated, it is 3%. To be frank, upfront and honest, eliminating consistent poverty to zero is not going to be achievable. It is not possible. It is a factor of the way it is measured. It is relative and is based on 60% of median income. That is the threshold. We will always have a median income. If we got everyone in the country above the 60%, the following year the median income would rise and you would be chasing it. It is about making progress towards it. The circumstances outlined are horrendous in terms of the school and people in serious deprivation. We have to address those issues and help the most vulnerable.

Just to be up front, there is a statistical quirk in the way it is measured. It is going to take far more than income supports. In the past two years, the trend for poverty, particularly child poverty, went up. In the past year, it went down again. However, the real quantum change here concerns access to a range of supports across government. It is also a matter of employment. We have to see an increase in employment, whether it be part-time initially or full-time. Getting people into employment is the change needed. That is why the schemes we are talking about are so important. They facilitate people currently, but we believe they could facilitate more people to progress more easily and reduce some of the complexity in the system. However, as the Deputy said, they are very effective at poverty mitigation. The rate for the poverty mitigation effect is essentially 62%. We are consistently the highest performing within the EU at poverty reduction on foot of our existing social welfare schemes. It is important that in whatever changes we make, if any, we do not lose that effectiveness. That is not an outcome that anyone wishes to see.

Also required will be continued access to childcare. The national childcare scheme is very important for parents, particularly lone parents, to access employment opportunities. Housing supports and affordable housing relate to difficult issues, but they are fundamental. The supports are not just income supports from a social transfer; they comprise a combination of measures and packages to reduce the cost of living. As many of the committee members have already alluded to, secondary benefits, including the medical card, have come up. Transitioning to employment while retaining a medical card, or the GP visit card, for a period has also come up. The universal provision of GP visits for under-eights is a key measure. Free schoolbooks for primary level and junior cycle children are important because they reduce the costs. Hot school meals also reduce costs for parents. All of these are components in delivering on child poverty, so there is not one answer here. The quantum is very significant. A significant investment is already being made.

The question of rates and tapers has to be determined. We are going through the public consultation process. At the moment, we are getting feedback and people’s views, including from people who are in receipt of the payments, but we also need to be cognisant of existing supports. Our range is going to be with a quantum of these. The Minister is saying he does not want to see any losers, so we are very conscious of that. With regard to the limit of what is available and a potential taper, the Deputy is talking about a situation whereby, with the working family payment, if a family has eight or more children, the upper threshold is €1,500 net per week. That is a significant upper threshold. There is a limit to what we can do here, to be absolutely honest.

As ever, there will be difficult budgetary decisions. Any measures we introduce here could have a significant cost. I do not know the extent but, when it comes to the budget, we also have to look after the other measures that fall within the remit of the Department of Social Protection. The Minister will have to make difficult decisions about pensioners, carers and people with disabilities, all of whom are in cohorts that are absolutely worth supporting. Therefore, there will be a balance to be struck. There will not be a silver bullet; it will be gradual. Our purpose from the public consultation is to take on board views, consider this issue properly in the round and then do detailed modelling to determine the implications of a potential new proposal. Then it will be up to the Government to decide.

Peter Roche (Galway East, Fine Gael)
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I apologise for being absent for the first hour. I was next door at a meeting of the health committee. The witnesses are most welcome. I read the submitted statements and, of course, have been listening attentively since I popped in. Like others, I welcome the proposal. It is still a work in progress, and the consultation process has begun.

I am always reminded that, no matter how much you target or how much money you give to some households, they will still have child poverty issues. Some people are notoriously bad at budgeting. Sometimes their priorities are different. We are well aware of circumstances where families may have drink, drug or related issues that might pose problems for them. Therefore, I am convinced that while many families will benefit from the proposal, it could still feed into a pattern of not managing household income in the best way. I am always conscious that we should be incentivising people to work. I would like to think that any payment given still makes it attractive for people to try to get a job, part-time or otherwise. We should make it the case that work always pays, rather than the thinking being that we will keep giving the blood supply to those sitting at home.

Are there circumstances in which the payment will push people’s income above the housing waiting list threshold, sometimes quite significantly? I am anxious to understand whether it could be the case that people would go above the income threshold in terms of qualifying for housing support. We had plenty of conversations here in the past year on the topic of hot school meals and their benefit to some parents in reducing child poverty. That was most welcome. My question is on the household income threshold and any risk there might be of losing other supports people may want to qualify for.

Mr. Niall Egan:

On the Deputy's comment about budgeting, the Department, via the Citizens Information Board, funds the Money Advice and Budgeting Service, MABS, which provides an excellent service. That service is available for anyone in the circumstances he has described. A lot of our personal advisers on employment encourage people to avail of MABS, and the Citizens Information Board does so as well.

Thresholds are a recurring theme across the board in terms of the interventions. We are very mindful of the issue, but that issue currently exists with jobseeker’s allowance and the working family payment. We are very aware of it, but in any changes we make following public consultation, and depending on what the Government decides to do in relation to this, we will have to be careful not to make things worse. We must ensure we do not unintentionally create a situation that puts people at risk of having to access secondary supports.

Peter Roche (Galway East, Fine Gael)
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I thank Mr. Egan.

William Aird (Laois, Fine Gael)
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I have just three questions that I wanted to ask. The briefing note presents these reforms as modernising the welfare system, but has the Department fully assessed whether merging and redesigning payments could create new complexity and confusion for families who are struggling to navigate the system as it is?

Mr. Niall Egan:

We have to be very conscious of that. Our systems and schemes support the vast majority of people but they are complex in how they interact with each other. As I have said previously, week on week a person may actually be better off, depending on his or her given circumstances, on a different scheme. That is not realistic and it is not fair on the individual. This is something we are considering. The intention behind these new payments, subject to what the Government decides, is to make it easier for people to make an informed decision. That is what we are trying to achieve.

William Aird (Laois, Fine Gael)
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If the working age payment is proposed to be extended, regardless of work status, what safeguards will prevent employers from relying on the State to subsidise low-paid jobs instead of improving wages and conditions?

Mr. Niall Egan:

Again, we are conscious of this. Essentially, we are not talking about the introduction of the first ever in-work support in the history of the State. The State has been providing in-work supports to people since the family income supplement, FIS, in 1984 and the jobseeker's allowance in the 1990s. The issue the Deputy has highlighted, of potentially providing a perverse incentive that some individuals might try to use, has, in theory, been an issue for the last 40 years.

Similar to what I said, it is not our intention to make any situation worse. We will, obviously, look at that situation. We want to make sure we are providing the right supports for people and there will be a gradual taper as opposed to having a cliff edge. This will mean that if people are offered additional employment on an additional day, they will not have to be worried, necessarily, about losing all their entitlements because of a cliff edge built into the existing system. We are conscious of the point made by the Deputy.

William Aird (Laois, Fine Gael)
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The consultation paper highlights fairness and consistency, but how will the Department avoid the situation where families with additional needs, particularly lone parents, larger families or people with fluctuating incomes, lose out more under a more standardised payment structure?

Mr. Niall Egan:

Our payment structure, and we do not envisage this changing, depends on the family composition size. What we will potentially be proposing, following the public consultation, will be that the principle, in terms of family composition and the number of children people have, will dictate the level of payment and support. That is our existing approach and it will be our continued approach. The difference here will be whether we can look at some of the tapering effects and cliff edges and remove them. If this approach were introduced, we should see people receiving support for longer.

William Aird (Laois, Fine Gael)
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That is great. I thank the witnesses for coming. I asked a lot of questions previously. I think this initiative is very good and it would be great if it is put in place. The words "detailed design" were used an awful lot. When this proposal does come out, I will certainly look at it with a magnifying glass. I just want to tell the Department that.

I have one final question. The Department has put a lot of work into this initiative. We are also putting a lot of work into it here this morning and putting forward questions. Does Mr. Egan see this happening during the term of this programme for Government?

Mr. Niall Egan:

It is very difficult to answer that question definitively. I can say that we are committed to putting forward detailed proposals. I have used that phrase again. My apologies.

William Aird (Laois, Fine Gael)
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That is all right.

Mr. Niall Egan:

We can introduce measures here that will make a material difference for a small group of people.

William Aird (Laois, Fine Gael)
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Absolutely, yes.

Mr. Niall Egan:

The real trick and the balance is in making sure that whatever measures we introduce here do not make it worse for the majority of people. That is the tightrope we are going to try to design and walk on.

It then depends also on the fact that there will be a cost implication to doing this. I am very conscious of the priorities the Government has had and stated in terms of other very worthwhile and vulnerable cohorts the Department supports, such as carers and people with disabilities. We will undertake the detailed analysis, make proposals and highlight what is possible. Fundamentally, it will be up to the Government to decide whether it wishes to proceed with our proposal.

William Aird (Laois, Fine Gael)
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When will the Department have its detailed design ready? Will it be in six months, 12 months or 18 months?

Mr. Niall Egan:

The timeframe we are looking at, realistically, because this initiative will require significant IT developments as well-----

William Aird (Laois, Fine Gael)
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Yes, I understand that.

Mr. Niall Egan:

-----and there is a long time lag with that, is that, with a fair wind behind us, we are probably looking at the end of 2028.

William Aird (Laois, Fine Gael)
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Right.

Mr. Niall Egan:

Realistically, then, we might look at the following calendar year or tax year to introduce it, so it could be early 2029.

William Aird (Laois, Fine Gael)
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We will be right into an election then, so it is not going to happen.

Mr. Niall Egan:

No. I would not say that.

William Aird (Laois, Fine Gael)
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That is the question I was trying to get at.

Mr. Niall Egan:

No, but-----

William Aird (Laois, Fine Gael)
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If the Department wants to put-----

Mr. Niall Egan:

To take it one step back, that is an implementation date. Obviously, we will have to go through a series of gates and Government approval before that. We will be looking at somewhere between 12 and probably 18 months of IT development here as well. We will be looking at next year, at some stage, putting the proposal to the Government to see if it wishes to proceed with it.

William Aird (Laois, Fine Gael)
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That will be positive.

Mr. Niall Egan:

What might actually be possible is that we might produce a series of proposals and the Government might pick one measure. It might not be both, it might be one or it could be everything. We just cannot, definitively, at this point in time, without my detailed analysis, answer that question.

William Aird (Laois, Fine Gael)
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Will it come back to the committee?

John Paul O'Shea (Cork North-West, Fine Gael)
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It will. Deputy Mark Wall has a further supplementary contribution.

Mark Wall (Kildare South, Labour)
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The reason we have a social protection system is to encourage people and look after people, many of whom are in poverty. Using wording like "blood supply" is not the right phrase to use in relation to those people I deal with and, I am sure, everybody else in this room deals with, because that blood supply is keeping so many people going. It is the wrong context to use in this regard, though, because many of those people are really suffering at this stage. I just wanted to put that on the record.

Mr. Egan has used the concept of a "cliff edge" many times today and mentioned people going back to work. We all want to do that. We want to make sure that the maximum number of people who can work in this country are working. That is the major aspect of this payment. I have mentioned the number of people who come to my office and tell me that they cannot take up work because of the medical card, the secondary benefits and the four-day rule. I encourage the Department, and this is a job of work for the committee to do as well, to pursue this payment in relation to the four-day rule and those secondary benefits. This initiative could be a game-changer for a lot of people who are doing a great job but who are also looking after their families and have to make a bigger decision.

There is fear there as well. Mr. Egan and Ms Kennedy have said some of that fear is unfounded, and that is true. We have to get the message out that there are other supports out there, including the additional payments people get if they return to work. I welcome those measures.

This initiative could be a game-changer, and whatever time it takes - I hope it can be done as quickly as possible - it will make a difference for so many of the people I deal with who are trying to decide if they are going to return to work or are going to give up. In my book, and that of the Labour Party, the more people we can get working in this country, the better. Promoting that is also important. This is a major issue and something we should return to as well because it could be a game changer.

John Paul O'Shea (Cork North-West, Fine Gael)
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I thank Deputy Wall. Deputy Hayes wishes to make a supplementary contribution.

Eoin Hayes (Dublin Bay South, Social Democrats)
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I agree wholeheartedly with the Minister's view, if it is his view, that there should be no losers in any changes made. That is extremely important.

Just so we have a sense of the situation, what is the figure for 60% of the median income? Below what point are people at risk of poverty?

I totally agree on the range of supports. It is absolutely right to say that poverty is not just a question of how much money people get into their bank accounts from social protection or social welfare payments. It is a question of childcare, education, hot school meals, housing and more housing. That is a really important point. As a point of distinction, one of the things that struck me at the cost-of-disability summit I attended last week with the Minister was people talking about transitions in their lives. The major inflection points where there is a real risk of poverty for people are when they are going into education, leaving education, entering employment and leaving employment. I would love to hear the Department's thinking on that.

Similarly, on the question of the range of supports for those in employment, I was really struck - current events excluded, because I am not allowed to talk about them - by the fact that in Summerhill, in the north-east inner city of Dublin, life expectancy is about 65 compared with the national average of 84. The area has a GP for every 3,000 people, as opposed to the national average of one GP for every 1,500 people. There are real questions, therefore, about the localisation of poverty and how that has major effects, and the range of supports. If the Department has any information on the geography in this regard, it would be very helpful.

There is also the question of complicating factors. At a recent committee meeting, we spoke about social protection supports for those who are self-employed. One of the questions I asked was the average earnings for PAYE workers compared with self-employed people, when we are talking about social protection supports. It actually turned out that self-employed people generally had, on average, lower earnings. It was kind of surprising, because I was not necessarily expecting that to be the case.

Can the witnesses give a sense, when they think of populations at risk of poverty, of what proportion are actually in that self-employed bucket, given this modern working? Are they gig workers, freelancers, delivery drivers or lone parents who may be graphic designers or something of that nature?

On a point that is important for the wider committee, I appreciate that if the way to measure people being at risk of poverty is to look at 60% of national median income, then, of course, if income goes up, then more people will be in poverty. Consistent poverty is such an important measure when talking about deprivation. When thinking about the question of deprivation and its different measures, how should the social protection system be more targeted with regard to people getting the winter cohort, being able to afford fuel, and all those kinds of things? How do we address and target deprivation?

Mr. Niall Egan:

I will start at the end. The levers the Department has to address poverty are essentially supports to people to get them closer to the labour market, whether that be education, training, or employment supports, with getting them into employment being the fundamental goal, and in-work supports to keep them in employment. Bar the education and training provisions and the employment support programmes, it is income-driven. They are the levers that we have. From a deprivation perspective, regarding the fuel allowance, the Deputy asked questions about heat and how we target that cohort with how we try to alleviate deprivation relating to the cost of fuel. There are questions of winter coats and whether they can entertain. From the Department's perspective, these are the income supports we provide to people through social welfare payments. We do not envisage a situation where we would buy winter coats for people. I know that is not what the Deputy intends. Our measures are such that if people have additional needs, we have the additional needs. If people cannot afford to get the car fixed and cannot afford the gas or electricity bill, given their circumstances, they can approach our community welfare service and receive additional needs payments. The Department is in that space.

The Deputy is correct that the self-employed have lower income, on average, compared with employees generally. They tend to be in the lower deciles. That is a historical trend. I stress that, as far as I am aware, it is not being driven by any movement of digital platforms or gig economy work that we have seen. That might yet happen but I have not seen any evidence to that effect. It is a long-term trend that the CSO has picked up and reported. I do not definitively know the difference between the national average wage for an employee versus those who are self-employed. I would have to look that up and revert to him. The CSO captures that as part of its suite of publications and surveys.

On the median poverty threshold, the way to look at it would be that it is equivalised income, so it depends on an individual in a household. From memory, the threshold is €18,000 to €18,500. We have seen a significant increase in the median income level over the past two to three years, in particular. Last year, median income went up by nearly 6% across the board. As that goes up and is reflected in people's earnings, it goes back to the Deputy's earlier point that, in Ireland, prior to social transfers, we have a significant income inequality issue. That is alleviated largely on foot of our tax and social transfer system. That is what is reflected in the data.

Ms Karen Kennedy:

Regarding that analysis of the cohorts who are at risk of poverty, it is an excellent question and interesting to look at. We had some engagement with the CSO. The risk of poverty rates and statistics are all determined through a SILC survey of 6,000. There is a limit to how much that can be subdivided and analysed because it is a representative sample. There is a lot of really interesting work within the CSO, looking at the administrative data and pulling together data sources to facilitate that level of analysis. The CSO has been active in progressing that, not just for Departments but also for researchers. There is not something easily available to date, but it is being worked on.

We draw attention to the self-employed in the discussion document. The intention is to modernise work and recognise that people may have multiple income streams. Ideally, we would be looking at bringing in that and having maximum flexibility. Going back to the data, the time lag with the availability of self-employed data presents challenges in different ways. The overall concept of the model we are putting there, going back to the Deputy's point on transitions, is about building in more flexibility and having something that can adapt to people as they go through different transitions, so we are removing cliff-edges or hard rules, and just looking at something that has greater flexibility. It recognises that people do go through those transitions and that it is a less complicated or risky process for them.

John Paul O'Shea (Cork North-West, Fine Gael)
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Could the witnesses give us more detail on benchmarking they have done to date against research from other countries and what they intend to do as a broader consultation after this public consultation?

Mr. Niall Egan:

We have reached out to colleagues in other jurisdictions. I will ask Ms Kennedy to come in. We are aware of the UK's universal credit. Being frank, we do not want to go down the route that it took and some of the mistakes and what we would see as design issues, which have led to significant difficulties. We have had discussions with colleagues in the Department for Communities on foot of that. They have been informative and useful. I ask my colleague to shed more light on other jurisdictions.

Ms Karen Kennedy:

We have reached out. We have had bilateral conversations with a number of countries to understand their equivalent schemes and see what lessons they have. Every scheme is different and complicated. There are commonalities too, including the balancing of the tapers versus work incentives. That is a common challenge across different countries. We have tried to take some of the lessons and present ideas within that. For example, one thing that we draw attention to in the discussion paper is potentially individualising the thresholds so that each member of a couple would get their own individual payment. That happens in the Belgian system. Similarly, the stand-alone income-related child payment is in place in a number of countries across Europe. We have reached out quite extensively to our European colleagues to learn as much as possible from their experiences and challenges and to try to use that to inform the ideas that went into the consultation paper. As we continue to evolve the design, those engagements, pathways and relationships remain open as we get into the detail.

Eoin Hayes (Dublin Bay South, Social Democrats)
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I have a quick question about the individualised thresholds and work. It has come up quite a bit in my office. In particular, older women speak to me about getting means-tested and how there is something going on with their overall household doing all right but they lose certain benefits. Carer's allowance is the particular case I am thinking of. There is a gender equality question. It should be lost on no one that, unfortunately, a reality of modern life is that there are people, regardless of gender, in coercive control environments. The ability for that person to access their own financial means and to be financially independent is important.

I would love to hear from the Department on that. How has it thought about the issue and what are its future proposals in that regard?

Ms Karen Kennedy:

The Deputy is totally right; there is very much a gender dimension to this. We recognise that, unfortunately, there are too many women in Ireland who are experiencing financial violence. Within the programme for Government, there is a commitment to enhance social protection supports for those fleeing domestic violence. That is something the Department has been progressing. There was recently a change to the travel supplement for people experiencing domestic violence. The Department has always provided support with regard to immediate needs. That continues to be the case. In a similar way to the rent supplement, this change allows people ongoing non-means-tested support with travel costs. This recognises that they may need to move and that they or their children may incur additional travel costs. That is something that has been brought in. The Department has ongoing engagement with Safe Ireland and the Dublin Rape Crisis Centre to build awareness of the supports that are available. Within that, we are looking at domestic violence as defined under the Zero Tolerance strategy, which includes the whole gamut of forms of violence, including financial violence and coercive control. That is something we are very conscious of. We welcome the views of stakeholders with regard to the idea of a more individualised payment, whether that would be beneficial and how it would work.

Eoin Hayes (Dublin Bay South, Social Democrats)
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To echo that point, it is absolutely paramount that the Department addresses the question of domestic violence as best as it possibly can. It is also worth keeping in mind the question of an individual's liberty and ability to manage their own independence in their own life. There is a dependence inherent in the historical design of social protection systems. It is based on the idea of a person being married and therefore part of one unit that is treated the same. Modern relationships and modern Ireland are not always like that. There is a question of gender equality more generally in how we think about social protection delivering for individuals as opposed to delivering for family units all of the time. I would love to see some progress on that as well.

John Paul O'Shea (Cork North-West, Fine Gael)
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That concludes our discussion on the public consultation on potential new working-age and targeted child payments. I thank our witnesses, Ms Kennedy, Mr. Egan and Mr. Mac Lochlainn, for their contributions and for providing briefing materials in advance of our committee's deliberations. For the benefit of those watching this committee meeting online this morning, I reiterate that the public consultation is open until 12 June. The details are available on the Department of Social Protection's website.