Kevin Humphreys (Dublin South East, Labour) | Oireachtas source

The main purpose of the Social Welfare (Miscellaneous Provisions) Bill 2015 is to provide for the introduction of the new back-to-work family dividend to help jobseekers with families and lone parents to return to work or to increase the number of hours worked. This measure will complete the implementation of the budget 2015 package of social protection improvements, which also included increases in child benefit and the living alone allowance which came into effect from the beginning of the year. This Bill also provides for an extension of the one-parent family payment to lone parents who are eligible for the carer's allowance until their youngest child reaches 16 years of age and an extension of the jobseeker's allowance transitional arrangements to apply to all lone parents where the youngest child is between the ages of 7 and 13 years.

All of these improvements have been made possible as a result of the many sacrifices that have been made by the Irish people and the difficult choices that have been made by the Government to successfully tackle the unprecedented economic and banking crisis. This has delivered an economic recovery that is gaining real momentum, and we are now seeing the benefits of this.

The Exchequer statement for the first quarter of the year confirms the progress that has been made in restoring order to the public finances. With tax revenues nearly 5.5% ahead of target, this is real evidence of the increase in the number of jobs being created.

The Central Bank has estimated GDP growth of 4.8% last year, with a further increase of 3.8% this year. The recovery in the economy has become more balanced over the past year, with the beginning of a recovery in consumer spending, which is showing signs of gradually strengthening.

The quarterly national household survey figures published earlier in the year show that the number of people in work has increased by 90,000 since we introduced our strategies to create jobs and reduce unemployment. A particularly welcome aspect of this increase in employment is that it is largely made up of full-time work. There was an increase of almost 40,000 people working full time last year alone. Total employment now stands at well over 1.9 million, the highest level in five years.

The latest live register figures for March show a continued decline in the number of people out of work, as the unemployment rate fell to 10%. This represents the lowest number of people signing on since February 2009. Most encouragingly, the latest figures show that the number of long-term unemployed has fallen to just over 160,000, a reduction of nearly 11% in the past year. However, unemployment remains too high and we still have progress to make in getting people back into employment.

Helping people return to work is probably the key goal driving everybody in this House. Having a job is the best protector against poverty and I am particularly encouraged by the fact that the vast majority of people returning to work are returning to full-time jobs. The longer one is out of work, the harder it is to get back into the workforce. Every new job for someone who has been out of work is a new future for his or her family and a boost to the community. The recent quarterly national household survey figures clearly demonstrate the continuing success of the Government's twin-track approach to creating jobs and helping people return to work.

Pathways to Work is ensuring that as many as possible of those newly-created jobs go to those on the live register, especially those who are long-term unemployed or at risk of becoming long-term unemployed. Through the provision of return-to-work supports, training and education, those on the live register are ready to avail of the growing number of jobs being created every month. The Action Plan for Jobs is helping accelerate that transition to a sustainable, jobs-rich economy.

The Pathways to Work strategy sets out a comprehensive reform of the State's approach to helping unemployed jobseekers return to work. Since its inception in 2012, the Pathways to Work strategy has seen the State's employment and entitlement services being brought together into one-stop shop Intreo centres.Group information sessions and individual profiling are fully operational in all of the Department's offices. Last year, the Department provided group information sessions to 186,000 jobseekers, including 56,000 long-term unemployed jobseekers. It also conducted initial one-to-one guidance interviews with 169,000 jobseekers.

In addition, we have introduced and enhanced a range of schemes and programmes in recent years to assist those out of work. These include the introduction of the JobsPlus and Gateway programmes, as well as the development of the First Steps youth development initiative and JobsPlus youth programmes which are specifically tailored for young unemployed people. Since 2012, 62,000 long-term unemployed jobseekers have moved into employment and we are on track to reach our 2015 target of 75,000.

As Minister of State with responsibility for employment, community and social support, I have a particular focus on reducing the number of people out of work for over a year. In this regard, my Department continually reviews its supports for jobseekers to ensure they do not act as a disincentive to taking up work or increasing the number of hours worked. The Department's engagement in this area has clearly demonstrated the great majority of social welfare recipients have a strong financial incentive to take up employment, disproving the misconception that one is not financially rewarded for going back to work. These findings are supported by the work of the Economic and Social Research Institute, ESRI, which confirms that work pays more than welfare for almost six out of seven unemployed people. These findings hold true even when in-work costs such as child care and travel to work are taken into account. This evidence clearly shows if we can create jobs, people will leave the welfare system to take up work.

However, it is reasonable that families who have been struggling while out of work for long periods will be concerned about the potential implications of moving from welfare to work, particularly when they have children. This is where the back-to-work family dividend comes in. Put simply, the scheme will allow a family returning to work to retain the child related element of their welfare payment, known as the qualified child increase, for two years. The dividend will be paid at a standard weekly rate of €29.80 per child, subject to a maximum overall weekly payment of €119.20 per week in the first year. The rate payable in the second year will be half the rate payable in the first year, subject to a maximum overall weekly payment of €59.60. Accordingly, over the two-year payment period, the dividend will be worth €2,324 in the case of a one-child family, €4,649 in the case of a two-child family, €6,973 in the case of a three-child family and €9,298 in the case of a family with four or more children.

This will mean, for example, that with the support provided through the family income supplement and the back-to-work family dividend, a person with a partner and four children who gets a job paying the minimum wage will be better off by some €304 a week, or €15,790 a year, by moving from jobseeker's allowance into employment. This is a highly progressive policy. The back-to-work family dividend scheme will operate during the period of economic recovery and will cease to operate with effect from 1 April 2021. The dividend will be tax free and will be payable in addition to any family income supplement entitlement that the person may have.

Two improvements will be introduced in this Bill to enhance the supports available to lone parents. The first improvement will extend entitlement to the one-parent family payment to lone parents who are also eligible for the half-rate carer's allowance payment until their youngest child reaches 16 years of age. This measure acknowledges the special situation and, in particular, the commitment of lone parents who are caring for people other than their own child such as a parent or sibling who requires full-time care and attention. The one-parent family payment scheme already provides for lone parents who are caring for children under 16 years of age and who are in receipt of the domiciliary care allowance.This entitlement is not affected by the ongoing changes to the one-parent family payment scheme. The amendment that is now being proposed will mean that the same level of support will be provided to those caring for someone other than their own child.

This measure is expected to impact positively on approximately 1,800 people, including the 800 individuals who were due to lose entitlement to one-parent family payment and half-rate carer's allowance from 2 July this year. The balance is made up of those who have lost entitlement since July 2013, as well as lone parents who will qualify for one-parent family payment for the first time when their youngest child is seven years of age or older and who are in receipt of carer's allowance.

The second improvement provides for an extension of the jobseeker's allowance transitional arrangements, which were introduced in July 2013. These transitional arrangements currently apply to lone parents who have been in receipt of one-parent family payment within the last three years and where their youngest child is aged between seven and 13 years. Under the transitional arrangements, which apply until the youngest child reaches 14 years of age, such lone parents are exempt from a number of the conditions applying to the jobseeker's allowance scheme, such as the requirement to be available for and genuinely seeking full-time employment. The measure being provided for in this Bill will extend eligibility for the jobseeker's allowance transitional arrangements to all lone parents where their youngest child is aged between seven and 13 years, whether or not that person has been in receipt of one-parent family payment. The jobseeker's allowance transitional arrangements allow lone parents with children aged under 14 years to balance their caring responsibilities and, significantly, this reduces their requirement for child care.

This Second Stage debate of the Bill will be followed immediately by Private Members' business dealing with the changes to the one-parent family payment that were introduced in the Social Welfare and Pensions Act 2012. While I do not want to pre-empt that debate, I would like to say a few words about the operation of the one-parent family payment scheme and the reforms that have been introduced. Despite significant levels of investment, the one-parent family payment scheme has not been successful in preventing lone parents from being significantly more at risk of consistent poverty than the population as a whole. For instance, in 2004, during the height of the boom and when the economy was doing particularly well, lone parents were more than 4.5 times more likely to be at risk of consistent poverty than the population as a whole. A significant reason for this was the passive nature of the one-parent family payment and the limited engagement by the State with recipients. For many lone parents, this has meant long-term social welfare dependency and associated poverty and social exclusion for both themselves and their children.

Social transfers have certainly provided an important buffer in reducing poverty and social exclusion among lone parents. Despite the strong level of income support provided to lone parents over the years, they have remained especially at risk of poverty. This is why I believe that the reforms to the one-parent family payment scheme are much needed. The best route out of poverty and social exclusion is through adequate and fairly paid employment. I want to end the expectation that lone parents may remain outside of the workforce indefinitely. As their children grow older, the focus must be placed on providing lone parents with the education, training and employment supports that will enable them to reach their full potential. The primary aim of the one-parent family payment scheme reforms is to reduce long-term welfare dependency and to improve lone parents' access to education, training and employment supports. Improved access to these supports will enhance their skillset and job readiness, which in turn will assist them with their transition to the workforce and their subsequent attainment of sustainable financial independence.

I have outlined the significant changes in the Bill. I commend the Bill to the House.