Róisín Shortall (Dublin North West, Labour)
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Question 67: To ask the Minister for Social and Family Affairs her plans to reform family income supplement to ensure that employment is incentivised for all jobseekers with families. [9234/10]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The family income supplement, FIS, payment provides income support for employees on low earnings with children. The manner in which the value of the payment is calculated is designed to preserve the financial incentive to take up or remain in employment in circumstances where the employee might be only marginally better off on social welfare payments. Fundamental to the design of the FIS scheme is that a person must be engaged in insurable employment for a minimum number of hours - currently 38 hours per fortnight. A couple may combine their hours of employment to meet the qualification criteria. The payment amount is based on a fixed proportion of the gap between the assessable income of the household and prescribed FIS income thresholds. As these thresholds are linked to the number of dependent children in a household, FIS provides an important policy instrument in reducing child poverty in working households as well as improving incentives to work.

An example of how FIS works is as follows. If a family has one parent working full-time and the other working 19 hours a week, with both on the minimum wage, their net income from employment would be approximately €500 per week. If they have four children, they would be entitled to a FIS payment of about €190 per week, as a top-up to their wages, giving them a combined net income from employment and FIS of about €690. If only one parent in the same family was working, and they were in full-time employment at the minimum wage, their gross income from employment would be around €340 per week and their additional income from FIS would be about €280 per week. Their combined net income from employment and FIS would, therefore, be around €620 per week. In both scenarios, they would also be entitled to child benefit of €155.53 per week.

Considerable improvements have been made to FIS since the late 1990s. These have improved its effectiveness as an instrument of support for low-income employees. These changes include a change in how income is assessed - that is, from a gross to net basis - and, in recent years, the refocusing of income thresholds to include additional gains for larger families. Partly as a result of this, and partly reflecting higher levels of take-up, spending on FIS has risen from €33 million in 1997 to an estimated €215 million in 2010.

Increases to FIS thresholds were already announced as part of the budget 2010 package. These increases effectively compensate low-income households on FIS for the necessary reduction in child benefit rates. I do not propose any further significant changes to the qualifying criteria of FIS at this time.

Róisín Shortall (Dublin North West, Labour)
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It is very disappointing that the Minister does not propose to reform FIS. It has never been as important as at present, when many families are suffering a reduction in their pay as a result of reduced hours or reduced pay rates. Does the Minister accept there is a real problem with the incentive to work, in particular for families with young children? There were no changes in the last two budgets other than small compensation measures for the reductions in child benefit. There are real problems at present, and all Members come across cases on a regular basis, increasingly so in recent times, where it is really not worth a family's while to go out and work because of low pay. For that reason, I ask the Minister to give serious consideration to this issue.

We should be encouraging as many people as possible to move from welfare to work but the Minister has placed obstacles in the way of many families. I ask her to consider reforming the scheme. For example, the 19-hour rule is not necessarily fair. I came across a group of workers recently who work 37 hours a fortnight, and I know of other workers who work three hours a day, five days a week. There must be flexibility in the scheme if we are to encourage people to avail of any work opportunities that exist. Similarly, the scheme is not available to the self-employed.

I ask the Minister to give consideration to reforming the scheme in these two areas in particular. What everybody should be trying to achieve is that those obstacles that exist for people who wish to move from welfare to work are removed.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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With regard to the self-employed, the scheme is designed to help people who are employees. There are other ways of supporting people on low income who are self-employed by bridging a gap between what they can show they are earning and what they would get on jobseeker's allowance.

When one considers the number of people currently benefiting from the scheme, which is growing all the time and is now 26,081, it shows we are responding to the growing need that exists. It is often felt that the right number of people were not actually accessing the scheme yet, when the Department in 2008 examined a review sample of 3,000 families whom they felt should qualify for it, in fact, only 23% of the families were actually eligible. There is a very high rate of awareness rate of this scheme but, while people know it is there, they do not know the criteria. Nonetheless, I accept we need to find as many ways as possible of getting the information across to people, including through the citizens information centres, our own offices and, in particular, employers, as they know exactly what people are actually earning.

With regard to the number of hours that people are working, we must distinguish between part-time and full-time work. While there is no definition of the number of hours which constitutes full-time work, 19 hours would in many cases be far more acceptable than 15. There is probably an argument in what the Deputy says about not taking the number of hours worked all in one week but spreading it out over two weeks. I will certainly consider that to see whether an issue arises.

Róisín Shortall (Dublin North West, Labour)
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I do not understand why the Minister says we must distinguish between part-time and full-time work. That is the exact point I am making. We need flexibility in the scheme so that people are encouraged or enabled to take up any job opportunities, even for one or two days a week or for a temporary job of a few hours. We need that kind of flexibility. The scheme as it operates at present was designed for a very different time and there is now a pressing need for the Minister to consider the reforms that could be introduced.

The other glaring problem is that there has been no compensation for the elimination of the early child care supplement. I know the Minister will tell me that people have a year's free preschool care but, overall, in terms of family income, where previously they would have had €1,000 per year per child for the first five years, in real terms that has now been cut to €2,500 in total. Therefore, instead of €5,000 per preschool child, a family now gets €2,500, which is a real and substantial loss in family income. There have been no corresponding compensation measures in the family income supplement to take account of this change.

I ask the Minister to be more flexible and to look at the world of work people are faced with nowadays, where there is flexibility and lots of part-time work, casual work and short-term work. The family income supplement needs to be sufficiently flexible to facilitate people in taking up those job opportunities.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The changes that came about in the family income supplement were designed to support any loss people might experience in regard to the child benefit but I appreciate there was no compensation factor for the early child care supplement. The Department is undertaking a broader review at present of child income support, the value for money review in that area and policy in that area, so it will certainly be examining family income supplement in that context. However, in the current economic circumstances, I cannot foresee a situation where there would be very significant changes that would create a huge financial burden.

Róisín Shortall (Dublin North West, Labour)
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In the current circumstances, the Minister needs to facilitate flexibility.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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What we need to do is to ensure that those people who qualify would benefit from it.

Róisín Shortall (Dublin North West, Labour)
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The Minister is missing the point.

Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 68: To ask the Minister for Social and Family Affairs her plans to change the one-parent family allowance; when she expects to introduce these changes; and if she will make a statement on the matter. [9231/10]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The Government believes that the current arrangements, whereby a lone parent can receive the one-parent family payment until their child is 22 without any requirement for them to engage in employment, education or training, are not in the best interests of the recipient, their children or society. Despite improvements made to the one-parent family payment over the years, a large proportion of lone parents and their children are still experiencing poverty.

In general, the best route out of poverty is through employment. We recognise that work, particularly full-time work, may not be an option for parents of young children. However, we believe that supporting parents to participate in the labour market once their children have reached an appropriate age will improve both their own economic situation and the social well-being of themselves and their families.

The Department has undertaken a comprehensive review of the one-parent family payment and developed proposals which are designed to prevent long-term dependence on welfare and facilitate financial independence, recognise parental choice with regard to care of young children but with the expectation that parents will not remain outside of the labour force indefinitely, and include an expectation of participation in education, training and employment, with supports provided in this regard. To meet these social policy objectives, the Government is considering various options for limiting the length of time for which the one-parent family payment can be paid, including the age of the youngest child. Any such changes would be phased in over a number of years for existing recipients to enable lone parents to access education and training and to prepare them for their return to the labour market.

The changes will also bring Ireland's support for lone parents more in line with international provisions, where there is a general movement away from long-term and passive income support. The EU countries achieving the best outcomes in terms of tackling child poverty are those that are combining strategies aimed at facilitating access to employment and enabling services - for example, child care - with income support.

We are conscious that many lone parents will need access to education, training and activation measures in order to acquire the skills they will need to gain employment. The Department has been working closely with other agencies to ensure that the broader needs of lone parent families are met and the changes to the one-parent family payment currently being finalised will be progressed in that context.

Olwyn Enright (Laois-Offaly, Fine Gael)
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It is ironic that in the past 13 years of Fianna Fáil in government, at a time of high employment, we have listened to the late Séamus Brennan, as Minister for Social and Family Affairs, and his predecessor, the Minister, Deputy Cullen, and now the current Minister, Deputy Hanafin, proposing changes to the lone parent allowance. Yet, when it might have been possible for lone parents to be activated into employment, nothing was done. Now that there are far fewer employment opportunities the Government is considering forcing them into employment.

Delegates from various groups representing lone parents attended a recent meeting of the Joint Committee on Social and Family Affairs where they informed us that 84% of lone parents are working, seeking work or engaged in education and training. Their main concern is that there be clarity on when a decision will be made, particularly in regard to the age at which payments will cease for the children of lone parents. When are we likely to get finality - in the words of one of the Minister's colleagues - on this matter? When will people be told where they stand?

The Minister has spoken about the issue of flexibility, something that is of particular importance for lone parents. In regard to poverty traps, will the Minister look at total household income rather than hours worked in calculating entitlement to different social welfare benefits?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I too have met with the various representative groups and found they had a valuable contribution to make to the debate. Many of them undertake independent research which is of particular value. I met some of the groups only last week and will meet a group of lone parents next week in Tallaght, including some very young parents, to ascertain their views.

The original documents that were circulated suggested that the lone parent allowance might cease, without any obligation of work or education, once the child reaches the age of seven. It is my view that seven years of age is too early. Instead, I am considering that payment be ceased when the child reaches the age of 13 years. At that age children are in secondary education and have a longer school day with more after-school activities. Therefore, parents are not in need of full-time child care.

I am working with the Minister of State with responsibility for children on child care issues and I have spoken to the Minister for Education and Science about education activation and training opportunities. I assure the Deputy that any changes will not be brought in suddenly. We must give people notice to enable them to avail of the education and training they will need. There is no question of simply cutting off payment. Hopefully, these people will be able to participate in work or full-time employment. We have noticed that there is a tendency among lone parents to sit on a certain number of hours because of their fear of losing the book.

Olwyn Enright (Laois-Offaly, Fine Gael)
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I do not blame people for sitting on a certain number of hours. The reality is that even three or four additional hours of work means they will lose their lone parent entitlement and therefore be worse off. That is the problem. I support in principle what the Minister is trying to do but the system will not allow it to be done. There will not be sufficient places in education and training, transport will not be provided to those learning facilities and there will not be sufficient child care services to accommodate parents. Children of 13 years still require to be taken care of when they come home from school.

There will have to be a significant change in how the Minister's Department, the Department of Education and Science and FÁS operate if the proposed changes are to be successful. The Minister said she has had discussions with her colleagues. What changes do they propose or what changes has that Minister asked them to make to ensure people have access to the supports they require? There must be a carrot as well as a stick. All we have heard about so far is the stick.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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We are not talking about a substantial number of people at any one time, with approximately 2,000 people coming off the payment in a given year. If we start working with those people three or four years in advance, they will be able to benefit-----

Olwyn Enright (Laois-Offaly, Fine Gael)
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The Department's facilitators have already seen 20,000 people.

Brendan Howlin (Wexford, Labour)
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The Deputy must allow the Minister to reply.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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If we are talking about a cut-off point of the child reaching 13 years of age, we will have an opportunity, three or four years in advance, to ensure parents are benefiting from education and training. There must be a sea change in cultural attitudes so that lone parents, particularly young parents, are not looking forward to a 22-year time span during which they are not obliged to take any responsibility for their own education and training or advancement into employment. The intention is that facilitators will work with people from the time they make their first application and at regular intervals until their child is 13 years old.

Olwyn Enright (Laois-Offaly, Fine Gael)
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That is not the real world.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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In regard to child care provision, there are 1,000 community-based crèches throughout the State in which 30,000 children are being cared for. Lone parents receive good rates in those facilities and are afforded priority of access.

Olwyn Enright (Laois-Offaly, Fine Gael)
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They lose those benefits once they start working.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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We have had discussions about ensuring that lone parents who go into employment will continue to access those benefits. The Department is also talking to FÁS about ensuring that the skills courses lone parents may need to avail of do not begin at 8.30 a.m. which would automatically exclude many of them.