Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 18: To ask the Minister for Social and Family Affairs his plans to allow pensioners to earn extra cash while retaining full pension rights; when he will introduce this change; and if he will make a statement on the matter. [30849/05]

Séamus Brennan (Dublin South, Fianna Fail)
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As the Deputy will be aware, there are three social welfare schemes providing pensions for older people — old age contributory pension, retirement pension and old age non-contributory pension. In the case of the first two, these are contributory schemes payable at 66 and 65, respectively. People who receive old age contributory pension can work without restriction while those applying for retirement pension at age 65 must be retired from employment or self-employment. Retirement is defined as not having earnings from employment of more than €38 per week or earnings from self-employment of more than €3,174 per annum.

However, given the improvements in life expectancy which have occurred in recent decades and the demographic changes our society will face in the years ahead, it is important that we should encourage and facilitate people who wish to extend their working lives to remain active. In the circumstances, the Government is committed, as part of the programme for Government, to removing the requirement to retire at 65 in order to receive a retirement pension. The old age non-contributory pension is different in nature to the contributory schemes.

In common with other social assistance schemes the old age non-contributory pension features a means test which is intended to ensure that available resources are targeted at those who are most in need. The means test is continually kept under review and in June this year a change in the assessment of capital was introduced which allows for capital of €20,000 to be disregarded when eligibility for old age pensions is being assessed. This figure is doubled in the case of pensioner couples.

However, at present people on non-contributory pensions can only earn up to €7.60 per week without payment of their pension being affected. It is important that we also provide incentives and choices within the non-contributory scheme for older people to remain active in the workforce, if that is their wish.

The very limited disregard which is available on earnings may act as a disincentive to people to continue working and, accordingly, I am at present examining the situation. Possible changes will be considered in a budgetary context, and in the overall context of social policy reforms.

Jack Wall (Kildare South, Labour)
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Question 19: To ask the Minister for Social and Family Affairs if he will increase the earnings disregard of the one parent family payment to a lower limit of €190 per week, with an upper cut-off point of €325; and if he will make a statement on the matter. [30934/05]

Séamus Brennan (Dublin South, Fianna Fail)
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The one parent family payment is designed to provide income support to parents with insufficient means who are parenting alone. This can arise as a result of being widowed, or following separation or divorce, or being unmarried.

One of the objectives of the one parent family payment is to encourage lone parents to consider employment as an alternative to welfare dependency, while at the same time supporting them where they choose to care for their children in the home.

The main element of this policy is an earnings disregard of €146.50 per week. Earnings above this limit are assessed at 50%, up to a maximum of €293 per week. There are also transitional arrangements in place whereby a lone parent who exceeds the earnings threshold may retain 50% of his or her payment for a further six months. Any changes to the disregard or the upper limit would fall to be considered in a budgetary context and also in the context of broader social policy reforms in this area. Lone parents who exceed the upper income limit applying under the one parent family payment may be eligible for the family income supplement. The family income supplement, by providing cash support for employees with families on low earnings, 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.

It is generally accepted that for people in working age households, the main route out of poverty is employment. The OECD, in a recent report on an international comparative study on reconciling work and family life, found that employment participation among lone parents in this country is among the lowest in the OECD. This is despite the huge employment growth and increasing female participation in the workforce in recent years and the income disregards afforded to lone parents under the one parent family payment who take up employment.

One of the key tasks in the Ending Child Poverty initiative under Sustaining Progress is to address obstacles to employment for lone parents. The senior officials group on social inclusion was mandated late last year to examine this issue and report back to the Cabinet Committee on Social Inclusion with specific proposals.

A subgroup of the senior officials group has been examining obstacles to employment for lone parent families, with particular emphasis on income supports, employment, education, child care and support programmes and information.

We must also look closely at income supports and at how we can adjust those supports to better address the social problems that can arise for those who receive these payments. In this regard, my Department has established a working group to review the income support arrangements for lone parents. Issues being addressed include the contingency basis of the one parent family payment, cohabitation, maintenance and secondary benefits. A consultation process with social partners and other interested parties was also undertaken to inform the work of the group. The findings of this group are feeding into the work of the senior officials subgroup.

The Cabinet Committee on Social Inclusion has been updated on the progress of both working groups. I will bring the final reports to Cabinet shortly. It is intended that the outcome of these reviews will contribute to the designs of proposals aimed at better supporting and encouraging lone parents to achieve a better standard of living, employment and education opportunities, and a better future for themselves and their children. These will be the main criteria against which recommendations in the reports will be judged. I am committed to reforms that will improve the quality of life for lone parents and their children by offering them respect and support while avoiding poverty traps.