Róisín Shortall (Dublin North West, Labour)
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Question 564: To ask the Minister for Social and Family Affairs his plans in relation to the elimination of poverty traps that exist in the welfare system. [21100/07]

Martin Cullen (Waterford, Fianna Fail)
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In providing vital income support to the unemployed and other disadvantaged people there is a constant balance to be maintained in ensuring that programmes are developed in ways that are sufficiently responsive to various contingencies, while simultaneously providing opportunities to assist people to become less welfare dependent.

I am conscious of the need to facilitate persons in receipt of social welfare payments when taking up employment opportunities. To ensure that social welfare supports are structured to support this objective, a number of measures have been introduced in recent years to remove disincentives to taking up employment and to assist in the transition from welfare to work. These measures include easing of means tests through income disregards, tapered withdrawal of benefits as earnings increase and employment support schemes such as the back to work programme. Examples of this approach are the jobseeker's allowance disregard of 40% which applies to net earnings from employment when a recipient of jobseeker's allowance takes up work, and the one parent family payment weekly cash disregard and 50% assessment up to €400. People with disabilities can also avail of earnings disregards when engaging in work of a rehabilitative nature. The most recent Budget also saw the introduction of enhanced disregards of earnings in relation to the rent allowance scheme which complement the rental accommodation scheme that was introduced in 2004.

In addition, the in-work income support provided through the family income supplement scheme provides ongoing income support for people in low-income employment with children. These measures have succeeded largely in removing many disincentives to work or to increasing employment where previously, in certain circumstances, there may have been little or no incentive to take up employment.

Further progress in removing poverty and inactivity traps is shown in the two important reforms which I have introduced today. These reforms improve the methods by which a person's earnings from employment (or the earnings of their partner) are assessed and will facilitate persons in increasing their levels of employment and income. Under the previous assessment procedures a trap existed whereby the loss in benefits to a household could exceed the gain in income attained by a partner increasing their earnings. The new assessment of a spouse's or partner's earnings introduces a system whereby both adults associated with a jobseeker's allowance claim are assessed in a similar manner and will result in an assessment which is simpler and easier to understand and which ensures that the families will gain when earnings increase.

These changes are designed in particular to be progressive for women, who currently make up the majority of qualified adults in the social welfare system, rewarding increased labour market participation and encouraging qualified adults to move beyond long-term part-time employment. They also remove an anomaly in the assessment of means which discriminated against people with children, through the introduction of a daily earnings disregard of €20, benefiting many part-time workers, but particularly those with children. For example, a couple earning €290 per week over three days with two children could gain over €112 per week jobseekers allowance under the new arrangements. In contrast, previous arrangements discouraged all but a small level of attachment to the workforce. The new arrangements also apply to the disability allowance, farm assist and pre-retirement allowance schemes.

Notwithstanding these improvements, it should be appreciated that poverty traps can feature in any contingency-based system which features income thresholds. However, the measures outlined, including those just introduced, will have the effect of greatly reducing the incidence and extent of poverty traps and ensure that they will only arise at significantly higher income levels than previously applied.

My Department will continue to monitor the operation of its schemes with a view to ensuring that poverty traps and disincentives are removed.