Dáil debates

Wednesday, 6 December 2017

Social Welfare Bill 2017: Report and Final Stages

 

7:55 pm

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I move amendment No. 5:

In page 13, after line 38, to insert the following:"17.The Minister for Employment Affairs and Social Protection shall review the impact of removing income generated from rent-a-room relief from the means test for those in receipt of the One Parent Family Payment and shall bring forward a report on the same within 6 months of this Bill being enacted.".

This amendment requires yet another report, on the impact of removing income generated from rent-a-room relief from the means test for those in receipt of one-parent family payment. The Minister will be aware that we have a scheme called the rent-a-room scheme for tax purposes. It means that if somebody rents out a room in his or her house, that person can earn up to €14,000 per annum tax free. Unfortunately, a reciprocal arrangement does not operate for people in receipt of social protection payments. People in receipt of means-tested social welfare payments are means-tested on every cent from that rental income.

I am focusing on lone parents in particular and of all the different groups, the poverty statistics among lone parents are very dramatic indeed. According to a small calculation I did, if a single parent looking after three children is earning €350 per week and renting a room for €80 per week, that person will only gain €35 because of the means test. This is a disincentive for people among the poorest group in society to earn a little extra income which they badly need. It is a classic poverty trap. I want a report to be done so that it can be referred to committee and we can point out, as I am sure we will be able to, that the financial consequences of this will be minuscule because, due the means tests that exist already, one will find that very few single parents rent out a room in their house. In many cases, they do not have any room to rent out. In other cases, the disincentive is so strong that it is just not worth their while to do it. Such a report would be worthwhile and we can work out the financial implications and discuss that at committee with a view to removing that anomaly and difference in tax treatment between renting out a room and the social welfare treatment when people are in receipt of means-tested social welfare payments in next year's budget.

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