David Stanton (Cork East, Fine Gael)
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Question 1: To ask the Minister for Social and Family Affairs the schemes available to widows or widowers in receipt of pensions from his Department to enable recipients to re-enter the workforce; his views on an increase in the earnings and income disregard, in particular for young widows, many of whom have dependant children and may have been outside the workforce for a considerable amount of time; and if he will make a statement on the matter. [4936/06]

Séamus Brennan (Dublin South, Fianna Fail)
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At the end of December 2005 there were just under 124,000 people in receipt of a widow's or widower's pension. More than 109,000 of these were getting a contributory pension based on social insurance contributions. There is no means test in such cases and therefore the question of earnings or income disregards does not arise.

Of approximately 14,700 persons who get a non-contributory means-tested pension, 12,700 are 65 years of age or more and 2,000 are under 65. As the Deputy has asked me in particular about younger widows, I would point out that fewer than 200 of these are under the age of 50. In addition, there are just under 1,000 widowed people who receive one-parent family payment, 500 of whom are under 50 years of age.

My Department assists and encourages long-term unemployed, and other welfare recipients including persons in receipt of widow's or widower's non-contributory pension, to return to work, training or further education through a range of measures administered by my Department's social and family support service.

One significant measure is the back to work allowance scheme which incentivises and encourages people to return to work by allowing them to retain part of their social welfare payment for a period when they take up employment or self-employment. Widows or widowers who have been in receipt of a non-contributory pension for 15 months may qualify for the back to work scheme when they take up employment. If they are over 50 years of age or if they take up self employment they can qualify after 12 months. Research has shown that up to 80% of participants remain in employment or self-employment following participation.

The Department also administers the back to education allowance programme. This programme provides support to long-term social welfare recipients who need to obtain educational qualifications before re-entering the labour force. A survey in this area has shown that 63% took up employment following participation in the scheme.

In 2005, €2.8 million was accessed through the special projects fund administered by my Department and €2.1 million from the family services project fund to support similar initiatives.

As part of a determined drive to increase opportunities for widows and widowers on means-tested payments, and for lone parents, to engage in employment, the upper earnings income for the one-parent family payment was substantially increased in the recent budget by €82 per week to a new limit of €375. Widows and widowers will be able to maximise their income from different sources as the means test makes provision for the exemption of significant levels of earnings.

On employment, lone parents, including widows and widowers, may earn up to €146.50 per week without it affecting their payment. Above that level, half of any earnings are assessed as means, up to a maximum of €375 per week.

From 30 June 2006, persons whose earnings have risen above €375 per week may be entitled to half of their payment for up to 26 weeks.

Additional information not given on the floor of the House

The increased income limit will allow several thousand people become eligible for a payment for the first time.

While I am satisfied that these improvements constitute a significant support to widows, particularly those who are re-entering the workforce, I will continue to keep the matter under review.

David Stanton (Cork East, Fine Gael)
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I thank the Minister for that response. Does he have plans to introduce an earnings disregard for young widows similar to the one introduced for those age over 66? Could he introduce a tapered withdrawal, a half-rate payment of benefit for widows, similar to that applicable to the one-parent family payment? Is there a barrier to widows or widowers on contributory pensions doing FÁS courses? A woman who came to see me recently stated she was not allowed take up a FÁS course while she was in receipt of widow's contributory pension. I thought that was strange. Would the Minister clarify the matter? When will we see the publication of the promised lone parent review because that will also take into account the position of widows?

Séamus Brennan (Dublin South, Fianna Fail)
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I am considering the extension of the €100 which we introduced in the budget for non-contributory old age pensioners. That is currently not available to widows on non-contributory pensions. It obviously does not apply to widows on contributory pensions because there is no means test in that regard.

On the numbers I gave the Deputy in my reply, he can see that there is quite a small number involved. There are approximately 14,700 widows who get a non-contributory pension, 12,700 of whom are over 65 years of age and approximately 2,000 of whom are therefore under 65.

The Deputy asked about younger widows. As I pointed out that approximately 200 of them are under 50, we are not dealing with large numbers of recipients. Particularly because of that, I have asked the Department to examine whether that €100, which is currently available for non-contributory old age pensioners, could be extended to widows on non-contributory pensions because widows on non-contributory pensions are on the old disregard of €7.60 and it would make sense. It was not provided for in the budget arithmetic and therefore I must see how expensive it would be and whether I could meet it from within my existing resources. My suspicion is that I probably could meet it from those resources, given the small numbers involved.

I will take a close look at that because it is only fair that we should not reduce the non-contributory pension of a widow — or widower, although I refer to a widow in particular — who wishes to work to earn further income. The €100 to which I refer would be useful in that regard and I will return to the Deputy on that matter. In recent days I have asked that the matter be examined.

The Deputy asked about the lone parent review. The Cabinet has now approved the report. There are two reports, in fact, which we are putting together in one document. This report will be made available for public discussion within a couple of weeks. Over the next few months we will try to make solid progress in this area.

The Deputy asked about barriers to availing of FÁS courses. I know of no barrier to widows or widowers accessing FÁS courses. Some courses obviously involve age requirements. Particular careers, training and skills that might not be suitable for older widows would be suitable for younger ones, but I am not aware of any particular discrimination against widows or widowers in the case of FÁS courses.

David Stanton (Cork East, Fine Gael)
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There is one other point. Is the Minister aware that the CDA part of the contributory pension is taxed and that there seems to be an anomaly in that regard? Could he raise the matter with his colleague, the Minister for Finance, to ensure that does not happen? It is given particularly to assist with the rearing of children and it seems strange that it is taxed. I understand that the Garda one is not taxed because it is maintenance, whereas this is seen as an increase. Perhaps the Minister might look at this area.

Séamus Brennan (Dublin South, Fianna Fail)
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Is the Deputy talking about the CDA being added on to the contributory pension and being part of the contributory pension?

David Stanton (Cork East, Fine Gael)
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Yes.

Séamus Brennan (Dublin South, Fianna Fail)
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The contributory pension is not taxed as such but if it is added to other income which takes one above the threshold of tax allowances, then it is taxed. Perhaps that is what is happening in this case. CDAs are not taxed as such——

David Stanton (Cork East, Fine Gael)
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That is correct but when it is added on, it is.

Séamus Brennan (Dublin South, Fianna Fail)
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——but if it is added on to other income, I could see how it would fall into the income net. I will take a look at it but I suspect the answer is as I stated, that if the total income from whatever sources — one's welfare and non-welfare income added together — brings one over the limit, then one pays tax on the combined figure.