Michael Brennan (Progressive Democrats)

I appreciate Senator Terry's remarks on PRSI. Extensive discussion was held on this issue, which some felt was informal income and, as such, should not involve either tax or PRSI. I took the opposite view. To ask women in particular not to have a PRSI contribution for a period, however small the income, would store up trouble for the future. Some other Minister may be standing here in 20 years time and be asked to backdate it, for example. I am glad the Senator spotted the issue and had been calling for it. I appreciate the comments.

Senator Jim Walsh is correct in his comments on the €10,000 limit. It is income and it would be going too far to disregard it for welfare purposes on top of normal income. Welfare payments exist to support people and must usually take income into account. In some cases, such as child benefit, it clearly does not. In many cases across the board, however, income must be taken into account and treated accordingly. This income would be exempt from taxation, which is particularly useful, and the disregard would be up to €200 per week. If an extra disregard is put in, it would be difficult to integrate this into the social welfare system without introducing many other anomalies.

I will give an example. A lone parent minding children in the home could earn up to €200 per week before the payment would be affected. A lone parent minding children in a crèche or on a community employment scheme could have his or her payment reduced once the weekly earnings reached €146, which is the limit for lone parents. A specific disregard for child minding, as is sought in the amendment, could lead to poverty traps. Taking the combined income of welfare payments and allowable earnings, the incentive to increase earnings beyond the threshold, and thus move out of the welfare system, is likely to be removed.

Another example would be if a spouse of a person with two children was on unemployment assistance or the recipient of disability benefit. Up to €192 per week could be earned without affecting the payment, which would include qualified adult allowance and child dependent allowance additions for a spouse and children. In that case, the total household income would exceed €500 per week. That would clearly bring about a poverty trap that would not be sustainable. It would be increasingly difficult to get people back into the workforce if that type of income was permitted to be built up through use of the welfare system. This is a good scheme which has been generally welcomed across the Houses.

With regard to the €1,000 per annum allowance for children under six years, the first payment is in August, the second is in September and I hope the third payment will be in December. Thereafter, payment will occur in the week following the end of the quarter. As Senators know, it is a quarterly payment. The tax exemption on €10,000 of earnings should also help. I have no doubt that over the years these figures will only move in one direction.