Mary Coughlan (Donegal South West, Fianna Fail)

Under the Programme for Prosperity and Fairness, a working group was established to examine the role refundable tax credits can play in the tax and welfare systems. This examination included the possibility of paying FIS through the tax system. Both issues are closely related since a substantial number of FIS claimants have income which comes below the tax exemption limit appropriate to their family size. In order for such families to benefit from a tax credit system, the payment would have to be in the form of a refundable tax credit. Entitlement to FIS is not solely determined on the basis of the claimant's current earnings; account is also taken of family size, hours worked and duration of employment, as well as any earnings from the spouse or partner, where relevant. Not all of this information is currently available through tax returns made to the Revenue Commissioners. The system is, therefore, not capable of automatically identifying households with an entitlement to FIS.

In addition, the family income supplement's application is immediate whereas a return from the tax system is from the previous year. My Department has considered that point, arising from the deliberations that have taken place. We have examined ways of increasing awareness of family income supplement, which is referred to in the child benefit books. I agree with the Senator that we should state that FIS is an entitlement, not a hand-out.

Employees may be concerned that employers would know that they had made an application to the Department for a payment, but we have to get beyond that point. I have undertaken to examine new ways of encouraging people to apply for family income supplement. We have made a number of changes concerning it. For example, it is no longer taken as a means with regard to rent supplement. While all those changes are important, I share the Senator's view that we must reach out to people to ensure they will apply for family income supplement. Perhaps, as public representatives, we should re-examine this matter.