Hildegarde Naughton (Fine Gael) | Oireachtas source

I welcome the Minister of State to the House.

I welcome the legislation and the introduction of the back to work family dividend scheme. The need for this scheme was highlighted in 2011 in an academic study compiled by Hugh Frazer and Maurice Devlin from NUI Maynooth.

One of the findings to emerge most strongly from recent EU work on child poverty is that the work intensity of households is a key factor in explaining Ireland's level of children at risk of poverty. For instance, the social protection committee report showed that in 2006, 42% of children at risk of poverty in Ireland lived in households where no one was working. This compared with an EU average of 26%. The risk of poverty for this group of children was 74%. There was also a 52% risk of poverty for children living in households where the work intensity was 0–0.5.

The TARKI 2010 research showed that the Irish child poverty rate was high when both parents in a couple were jobless, and this group constituted 21% of all poor children. While the risk was much lower where one partner worked full time and one was jobless, they made up 23% of all children who were poor. By contrast, it was striking that when both parents worked full time the risk of poverty for children fell to 3%, and when a lone parent worked full time it fell to 8%. However, when both partners worked part time or a lone parent worked part time the poverty risk for children was quite high.

The role of unemployment or low work intensity in child poverty is reinforced by earlier Irish research, Layte et alin 2006. The study demonstrated that children in households where parents were unemployed or inactive in the labour force had a higher risk of spending time in poverty than children in households where two parents were employed. Analysis over an eight-year period showed that where neither parent was employed, nearly all children spent some time in income poverty. Where both parents were employed, children spent no time in poverty.

While the figures contained in those studies might have changed slightly over the past few years, they are still startling. It is simply the case, in poverty eradication terms, that employment is everything. Even during times of supposed full employment this country suffered from very high levels of jobless households and consistent child poverty.

Recent studies have shown that households with no employment suffer significant rates of consistent poverty and more so in households with children. The difficulty is that those children are very much at risk of intergenerational child poverty. This phenomenon has been present in Irish society for generations and it must be tackled. Innovative ideas are needed to ensure that the cycle of intergenerational unemployment, poverty and poor life outcomes is not continued into the future. In that light, this initiative is to be very much welcomed.

During the so-called boom the amount of social welfare expenditure multiplied at vastly greater rates than our inflation rate. What did that achieve? It helped to create a cycle of welfare dependency and poverty, thus ensuring that work simply did not pay. While throwing money at problems has long been a hallmark of previous Governments, this Government cannot afford fiscally or morally to continue the cycle.

In the 2013 and 2014 budgets this Government gave assistance to lone parents to re-enter the workforce with the afterschool child care scheme and the community employment child care programme. The absence of affordable child care is still a huge issue for families right across this country. I would welcome any measures in the forthcoming budget that would address this matter. The solution to ending intergenerational poverty is employment and ensuring that work pays.