Joan Burton (Dublin West, Labour) | Oireachtas source

Perhaps the Deputies are not aware of it. Both these schemes build on the annual investment of €260 million into high quality child care, which benefits approximately 100,000 children each year. We do not yet have sufficient quantity and quality in our child care system. This is why I very deliberately ensured that the age threshold at which the one-parent family payment ends would be two years higher, at seven years of age, than in the North or the countries I mentioned. In addition, I ensured that when the child is aged between seven and 14, lone parents will be exempted from the welfare conditionality that requires people to be genuinely seeking full-time work in order to claim a jobseeker's payment. I did it because I want better standards of child care. I dramatically changed what was going to happen in order to give lone parents in this country two extra years, plus seven years of transition, until the child turns 14 years of age. It is wrong of the Deputies not to have even examined the scheme or, apparently, noticed this. I have done this by introducing a payment known as jobseeker's transition to support lone parents with children aged between seven and 14. It means no lone parent with a child under the age of 14 is required to take up employment in order to receive income support from the State.

Under jobseeker's transition, lone parents do not have to be available and genuinely seeking work, but must engage with their local Intreo office on activation measures, which are based primarily around education, training and experience to help them to be in a position to get better paid work when the time comes for them. While people will receive a welfare payment and access to the full range of Department employment, education and training supports, they will have a transition period of seven years. People will enter the scheme when their youngest child is seven, whereas in the North, Sinn Féin's scheme begins when a person's youngest child is five years of age and there is no transition period. I do not understand why Sinn Féin is not seriously examining what is happening here. It is some kind of cheap populism and an easy target. The customers will have access to Intreo services and the opportunity to access a case officer on a one-to-one basis to agree a personal development plan.

I acknowledge and commend the many lone parents already engaged in employment in order to build better lives for their families.

I have worked with lone parents for a considerable part of my life and I yield to nobody in my admiration for the way in which they look after their children. SILC research shows that being at work reduces the at-risk-of-poverty rate for lone parents by three quarters. I ask the Deputies opposite to take that into account if they desire a genuine debate. In 2003, the OECD issued a report, Babies and Bosses - Reconciling Work and Family Life, which recommended reform of the one parent family scheme to reduce the expectation that lone parents could be in receipt of the payment for the long term. Several Members raised these issues out of genuine concern but the result of the scheme was to put lone parents in a category of their own whereby they are not as highly regarded as others and their children have a less favourable outcome. I admire those who parent on their own. We need to give them the opportunity to become financially independent and get the education they require to build lives for themselves and their children.

The first reduction in the age threshold of the youngest child was introduced in budget 2011, with this Government introducing further reforms in subsequent budgets. These reforms reduce the age of the youngest child eligible for the payment on a phased basis. The final phase will reduce the maximum age limit of the youngest child at which payment ceases to seven years for almost all recipients from Thursday, 2 July 2015. Approximately 30,000 lone parents will transition from the one parent family payment on that date. Some Deputies seem to believe that all of these parents will suffer an income loss. This is categorically not the case. In fact, two out of every three will not suffer any income loss or will actually gain from the transition. The majority of the remainder will be in a position to qualify for two additional welfare payments, family income supplement and the back to work family dividend, if they can increase the number of hours they work to 19. In doing so, they would be significantly better off than previously.

We currently spend €350 million a year on family income supplement alone to help not just lone parents but all families to take up work and build financial independence for themselves over time. Last year, the supplement supported almost 49,000 families in respect of more than 100,000 children. Similarly, the back to work family dividend, which was introduced in the last budget to further assist families return to work, provides is a significant financial support. The dividend is worth €1,550 per child in the first year and €775 per child in the second year. Already 1,000 families, many of them with lone parents, are in receipt of the dividend. As the dividend has no impact on a family's FIS entitlement, it offers a valuable incentive for lone parents to take up employment. It is a fallacy to suggest that these reforms are budgetary based when we are in fact spending significant amounts of money to support people back to work. These reforms are introduced in recognition that a scheme has not worked and we are changing it for the better to help lone parents avail of employment opportunities.

To further assist in the provision of appropriate supports to lone parents, my Department is sponsoring research by Dr. Michelle Millar of NUIG. The aim of this research is to identify best practice in how to assist lone parents improve their access to education and employment to ensure greater opportunities for their families. For lone parents who are already in employment and in receipt of FIS, we have for the first time introduced automatic increases in their FIS entitlement to ensure that their FIS increases to partially compensate them when they transition from the one parent family scheme. These customers have received letters informing them to that effect and the letters included application forms for the back to work family dividend. Lone parents who will be affected by the final phase of the reforms have been invited to attend information sessions in their local Intreo offices. Approximately 25,000 have been contacted by my Department in this regard. At the information sessions, Departmental staff are actively promoting the FIS scheme as the best financial option available. As a result of the information sessions, more than 1,250 lone parent families have become first time FIS recipients as a consequence of learning about the supplement, and they are financially better off than when they were claiming the one parent family payment. They will also be eligible to receive the back to work family dividend.

It should be noted that after the reforms have been fully implemented, lone parents whose youngest child is seven years of age or older and who are in employment will continue to receive a substantial level of financial support from the State. For example, lone parents with one child who are working 19 hours a week on minimum wage will receive a tax free payment of almost €235 per week. This is in addition to their weekly earnings of €165 and brings their cumulative income to almost €400 per week. A parent who remained on the lone parent payment would receive €218 per week, as opposed to receiving €400 from the income from 19 hours of work and FIS. That is an enormous for a parent who returns to work. For a three child household, the State support increases by €135 from almost €280 to €415 and the total income increases by €300 to almost €590 per week. A family in this situation would pay relatively little, if any, income tax. This compares to someone working 39 hours per week at the national minimum wage, who would receive €337 per week before tax. The financial incentives for working 19 hours per week are rewarding.

In addition to introducing measures to ease the transition of lone parents from the one parent family payment, we have made some important exemptions to the reforms. Recipients who are also in receipt of a half-rate carer's allowance payment will be able to retain their entitlement until their youngest child turns 16 years. This will allow these lone parents to provide care to another individual irrespective of whether that individual is their child or someone else. I realise that many of the lone parents who will transition from the one parent family payment this week and who are in receipt of rent supplement are concerned about what may happen to their rent supplement contribution. Where the lone parent has no earnings and transitions onto a jobseeker's payment at the same rate, there will be no change in the rent supplement contribution. However, where lone parents are in employment and are transitioning from the one parent family payment to another social welfare payment, their personal contribution towards their rent may decrease.

Lone parents who experience a financial loss as a result of the age reforms will be able to have their rent supplement reviewed, which may result in a reduction in their rent supplement contribution. This will reduce or even eliminate financial losses in some cases.

For those concerned about their ability to afford their rent, the Department has implemented preventative measures to provide for flexibility in assessing people's accommodation needs. We are using a case-by-case approach under the tenancy protocol. Already over 2,000 families, many of them lone parents, have been directly assisted in terms of their accommodation.

The reforms to the one-parent family payment are essential in creating a new, more active engagement process for lone parents. They are essential for helping lone parents to get back into education. All the time I meet people who have gone back to education and many are now qualified degree holders. Their independence and financial positions is so much more enhanced when the can get a well paid job. It is essential to do this in creating opportunity in this country for every family and not just a few.

The new approach will provide lone parents with enhanced access to advice, guidance and the supports and services they require to assist them. I look forward to examining the various supports available to all families with children, including lone parent families, in the next budget. In particular, I will look at the scope for improvements in child benefit.

I know Sinn Féin Members were scoffing at the notion of improving child benefit. Child benefit is paid to all families with children, whether they are one-parent or two-parent families. It does not matter whether people are going out to work, are self-employed or unemployed - it is paid to everybody. It is a very valuable part of our child support structure.

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