Gay Mitchell (Dublin South Central, Fine Gael)
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Question 64: To ask the Minister for Social and Family Affairs, further to his comments (details supplied), the reason families with incomes of between €30,000 and €40,000 per annum are now classified as the new working poor; the further reason 16,000 families approach the MABS on an annual basis to seek advice for debt problems; and if he will make a statement on the matter. [17206/05]

Séamus Brennan (Dublin South, Fianna Fail)
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The 2003 EU survey of income and living conditions, EU-SILC, indicates that 3.5% of people at work fell into the consistent poverty category, compared to 9.4% of the population generally. The survey further shows that 9.2% of people in Ireland who were at work were at risk of poverty, compared to 22.7% of the population generally. It is clear from these figures that being at work significantly reduces the risks of poverty and deprivation. However, despite the economic advances of recent years, some families who find themselves dependent on low wage employment are sometimes classified as the working poor.

The continued reduction of poverty is a core objective of this Government. In this regard, accepting and keeping a job is seen as the most important route to escape poverty and to ensure social inclusion. However, it is important to ensure that work "pays" and a number of policy instruments crossing a range of Government Departments are used as a way of preventing poverty among the working poor. These include changes to the taxation system, the introduction of a national minimum hourly wage, provision of training and access to lifelong learning opportunities, assistance with job search and placement, the introduction of flexible working arrangements and increased access to affordable child care and changes to the social welfare system to support the transition to employment and improve the retention of non-cash benefits during that transition.

One of the main policy responses in my Department, designed to address the problem of low income working families, is the family income supplement, FIS, scheme. The scheme provides cash support amounting to a minimum of €20 per week for employees who work a minimum of 19 hours per week or 38 hours per fortnight. This preserves the incentive to remain in employment in circumstances where the employee might only be marginally better off than if he or she were claiming other social welfare payments. Budget 2005 increased the FIS earnings thresholds by €39 in respect of each family size. This increase was unprecedented since the introduction of the scheme in 1984 and added €23.40 to the weekly payments of most existing FIS recipients from January 2005. The current average FIS payment is almost €94. The cost of this measure is estimated at €15.53 million in 2005.

Arising from the increased thresholds, it is estimated that 2,600 additional families became eligible for a FIS payment. The ongoing development of the FIS scheme has resulted in current levels of both applications and claims in payment being at an all time high. In 2004, some 21,000 applications for the scheme were received. Over 15,000 claims were in payment in 2004. Effective and adequate support for making work pay will continue to be a major priority for this Government and for me as Minister for Social and Family Affairs.

The money advice and budgeting service, MABS, is another resource for assisting people in poverty. My Department has overall responsibility for this service which provides assistance to people experiencing difficulty in meeting repayments on borrowings. There are 52 independent companies nationwide operating the service. More than 16,000 new clients approach the MABS annually and the service deals with 30,000 clients on an ongoing basis.

The MABS programme provides an independent, free and confidential money advice and budgeting service mainly to low income individuals and families who are in debt or at risk of getting into debt. Of the people who come to the MABS, the majority are people on social welfare and on low incomes who find difficulty in making ends meet and are excluded from mainstream credit. The MABS programme emphasises practical measures to remove people from dependence on moneylenders and open up alternative sources of credit for them. The programme has been very successful in that regard, and in budget 2005, I provided a total of €13.6 million for MABS.