Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

The family income supplement, FIS, is an in-work support that provides an income top-up for employees on low earnings with children. FIS is designed to prevent in-work poverty for low-paid workers with child dependants and to offer a financial incentive to take up employment. There are currently almost 57,000 families with more than 126,000 children in receipt of FIS. The estimated spend on FIS this year is approximately €422 million.

There has been a steady growth both in the number of families supported by FIS over recent years and associated expenditure, with numbers in receipt of FIS rising from around 32,000 families with more than 73,000 children in 2012 to almost 57,000 families and over 125,000 children by the end of 2016.

Expenditure on FIS has more than doubled from €224 million in 2012 to an estimate of €422 million for this year.

A number of factors have led to the increase, including a substantial increase in the numbers of people in employment, as well as increases in the FIS thresholds in 2016, which made more people eligible for FIS.

For example, the number of people in employment has increased over the past four years from 1.86 million people in 2013 to more than 2 million now. With more jobs, there are more people eligible for FIS.

The Department’s information strategy has also promoted FIS and increased the overall awareness of the scheme. This includes the use of the Department’s better off in work ready reckoner as an effective means of promoting in-work supports such as FIS. Many people who were entitled to FIS may not have known that they were in the past.

Another reason is the transition of people from the one-parent family payment to FIS. Over this period, more than 10,700 lone parents transitioned onto FIS and of these approximately one third were new FIS recipients.

As I mentioned before, budget 2016 increased the income limit thresholds by €5 for families with one child and by €10 for families with two or more children. As the thresholds were increased, the number of families eligible therefore increased.

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