Richard Bruton (Dublin North Central, Fine Gael)
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Question 789: To ask the Minister for Social and Family Affairs the options under consideration for a more family friendly child payment which would overcome the low take-up of family income supplement and the very rigid withdrawal of one parent family allowance once a person is earning an income of over the minimum wage; and his views on integrating a family friendly child payment into the tax code which would ensure a higher take-up. [1007/06]

Séamus Brennan (Dublin South, Fianna Fail)
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My Department provides cash support by way of weekly payments to families at work on low pay, through the family income supplement scheme. A number of improvements have been made to the scheme over the years, including assessment of entitlement on the basis of net rather than gross income and progressive increases in the income thresholds, making it easier for lower income households to qualify for payment. As a result, there are currently over 17,488 families receiving a weekly FIS payment, reaching nearly 33,956 children. This is the highest number of FIS recipients in the history of the scheme.

A lone parent can earn up to €146.50 per week without affecting the lone parent's payment. Earnings above this limit are assessed at 50% up to €293 per week. When the lone parents earnings go above this limit, transitional arrangements allow for the payment of lone parent's allowance for a further six months. Budget 2006 provided for the upper earnings limit to be increased from €293 per week to €375 per week, effective from July 2006. This will cost €5 million in 2006 and €10 million in a full year. It should be noted that recipients of lone parent's allowance may still receive FIS while they are receiving their lone parent's allowance and that if their lone parent's allowance is reduced they may qualify for a higher rate of FIS.

The National Economic and Social Council was asked to examine the feasibility of merging of family income supplement and child dependant allowance into a second tier child income support. Such a payment would be aimed specifically at targeting child poverty by channelling resources to low income families without creating significant disincentives to employment. The NESC is currently considering its draft report which, when finalised, will be of significant assistance in informing the future direction of child income support policy.

Payment of FIS through the tax system has been considered by a working group, including the social partners, the remit of which was to examine the role which refundable tax credits could play in the tax and welfare system. While the report of the group has not been finalised, it is expected that it will recommend that FIS continue to be paid by my Department, with a modified system of delivery and sustained efforts to improve take up.

In a determined effort to increase awareness of the FIS support and to improve take-up levels, my Department is currently preparing an awareness campaign that will be launched in the near future and which will include media and promotion initiative at national and regional level.